Economics – Page 2 – Illinois Business Law Journal

One of the primary problems with land conservation and use aside from the issue of sustainability, is that we as humans have established a culture that is prone to abusing the land we live on. We have tried to heal the environment using the new “Green” movement which is designed to have individuals change their behaviors and then as a result, the collective actions of our society will be environmentally beneficial.[1] However, this method has not produced the effects it was designed for.[2] Individual actions have not changed much and neither has public perception to the problem at hand.[3] This is reflected in the way our economy functions, the way we consume goods and dispose of them, and the expectations placed upon us by the government that we have elected.[4]

In fact in the course of property law, one of the most important aspects is that of exclusion in that … Read the rest

I. Introduction

The Coase Theorem has no doubt left an indelible mark on Law and Economics. The theorem proposes that, absent transaction costs, property will be allocated efficiently regardless of initial entitlement.[1] Widespread acceptance of this assertion has given rise to much legal analysis aimed at reducing transaction costs in order to lubricate bargaining and achieve efficient allocation of property rights. On the whole this is not a bad thing – transaction costs are a major obstacle to efficient bargaining and should be reduced. However, recent studies which indicate the existence of the endowment effect have lead many scholars to re-examine their initial assumptions regarding the importance initial entitlement.[2]

II. Background

A. The Coase Theorem

The main premise of the Coase Theorem is that, absent transaction costs, property rights will be efficiently allocated regardless of initial entitlement.[3] This conclusion leads to two further assertions … Read the rest

Category: Economics

The Failure of the Green Movement

Excluding the Endowment Effect?