Property w/market failure

• Tragedy of the Commons


  Market failure where common access resources are overexploited due to lack of private ownership
• Common access resources


  • Nobody owns them
  • No private ownership of natural resources like forests, seeds, air
• Lack of private ownership


  Perverse incentives lead to overexploitation and depletion of resources
• Issuing property rights


  Assigning private ownership of common access resources to solve tragedy of the commons
• Property rights


  • Need to be well-enforced to prevent trespassing and overexploitation
  • Can lead to socially optimal resource use levels
• Efficiently distributing property rights is challenging, especially for resources like air and seas that are difficult to divide
• Enforcing property rights is costly for the government
• Granting property rights


  Can lead to equity issues, with the rights-holder having significant power over other stakeholders
• A third-party government agency maintaining resource quality and issuing rights may be a better solution to ensure equity