Kaplow and Shavell have recently claimed that property rules tend to protect tangible entitlements more efficiently than do liability rules. They argue that while liability rules tend to efficiently harness the defendant's private information when courts are imperfectly informed as to litigants'...

The central allocative decision confronting a judge in a nuisance dispute should not concern the identity of the initial entitlement recipient but rather the identity of the more efficient chooserthe litigant who can more efficiently allocate the entitlement. We show that liability rules can...