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Fairness and the optimal allocation of ownership rights


Fehr, Ernst; Kremhelmer, Susanne; Schmidt, Klaus M (2008). Fairness and the optimal allocation of ownership rights. Economic Journal, 118(531):1262-1284.

Abstract

We report on several experiments on the optimal allocation of ownership rights. The experiments confirm the property rights approach by showing that the ownership structure affects relationship-specific investments and that subjects attain the most efficient ownership allocation despite starting from different initial conditions. However, in contrast to the property rights approach, the most efficient ownership structure is joint ownership. These results cannot be explained by the self-interest model nor by models that assume that all people behave fairly, but they are largely consistent with approaches that focus on the interaction between selfish and fair players.

Abstract

We report on several experiments on the optimal allocation of ownership rights. The experiments confirm the property rights approach by showing that the ownership structure affects relationship-specific investments and that subjects attain the most efficient ownership allocation despite starting from different initial conditions. However, in contrast to the property rights approach, the most efficient ownership structure is joint ownership. These results cannot be explained by the self-interest model nor by models that assume that all people behave fairly, but they are largely consistent with approaches that focus on the interaction between selfish and fair players.

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16 citations in Web of Science®
20 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:August 2008
Deposited On:04 Dec 2008 12:50
Last Modified:05 Apr 2016 12:37
Publisher:Wiley-Blackwell
ISSN:0013-0133
Additional Information:The definitive version is available at www.blackwell-synergy.com
Publisher DOI:https://doi.org/10.1111/j.1468-0297.2008.02169.x

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