The holdup and holdout problems arise in different contexts, but they share certain fundamental similarities that have not generally been recognized. In particular, both involve activities requiring an up-front, non-salvageable investment, and both require the investor to purchase an input, the...

This chapter examines the economics of property rights and property law. Property law is a fundamental part of social organization and is also fundamental to the operation of the economy because it defines and protects the bundle of rights that constitute property. Property law thereby creates...

The holdup and holdout problems arise in different contexts, but they share certain fundamental similarities that have not generally been recognized. In particular, both involve activities requiring an up-front, non-salvageable investment, and both require the investor to purchase an input, the...

This paper examines the economic implications of the definition of public use advanced by the Supreme Court in the case of Kelo v. New London. In its ruling, the Court asserted that the Fifth Amendment public use requirement is satisfied if the taking in question, even if for private ends,...

A handful of economically distressed cities and counties are considering using their power of eminent domain to write down the principal of underwater mortgage loans. Analogous to the condemnation of tangible real estate for public use, the city would “take” intangible mortgage loans from...

This paper presents an economic theory of property, tort, and contract law based on the goal of efficiently governing economic exchange relationships. In the theory, legal boundaries emerge endogenously in response to exogenous differences in the nature of the underlying transaction concerning...

This entry discusses the economics of eminent domain, which is the government’s power to take or regulate privately owned property for the common good. It discusses the origins of the power as well as its limits, particularly as embodied in the public use and just compensation requirements. It...

This paper assesses the economic characteristics of the balance that federal law aims to achieve between the interests of paleontologists and amateur and commercial collectors of fossils on US federal lands. The objective function is taken to be the maximization of the social value of these...

This paper develops a model of land title reform which shows that a policy of voluntary adoption of a new system is not likely to be successful, even if the new system Pareto dominates the existing one. The problem is the existence of an externality that prevents individual landowners from fully...

The eminent domain clause of the U.S. Constitution concerns the limits of the government's right to take private property for public use. The economic literature on this issue has examined (1) the proper scope of this power as embodied by the 'public use' requirement, (2) the appropriate...