Secure Property Rights Hinder Economic Efficiency, Bargaining Costs Prove Detrimental
This study looked at how the costs of making deals influence negotiations when dealing with secure and insecure property rights in a lab setting. The researchers found that when property rights are well-protected, bargaining efficiency goes down. Essentially, having insecure rights made economic outcomes twice as efficient. People with strong property rights often chose not to bargain and went for a safe option, which can be costly.