Imperfect Property Rights Undermine Efficient Markets, Worsen Inequality
Property rights are important for efficient markets, but what happens when they are not well-defined or enforced? A new model considers weak enforcement, unclear rights, and overlapping claims. Surprisingly, stronger penalties for violating rights can sometimes make things worse, and collective rights organizations like patent pools can create more problems. Combinations of imperfections matter, and one-size-fits-all solutions may not work.