Chapter 6

1. Discuss the sense in which the Coase Theorem renders the notion of “causation” essentially meaningless in externality or accident settings. What is the implication for deriving an efficient remedy?

2. In schoolyard or family settings, children often establish priority over a valued item or right by “calling it.” Discuss this method of establishing property rights.

3. Suppose the owner of a boat, on seeing an impending storm blowing up, moored his boat to a dock without first obtaining the owner’s permission. During the course of the storm, the boat did $500 worth of damages on the dock, but the boat was saved. The dock owner sued for damages and won. What assignment of rights and enforcement rule (property or liability) are implied by this ruling? Would it have made sense for the court instead to award the plaintiff more than the $500 in damages to deter the defendant’s actions?

3. Can you explain why people voluntarily enter into condominium or planned community contracts that greatly restrict their rights over their property?

4. The economist Hernando de Soto has argued that the key ingredient to successful economic development is a well-defined and easily enforceable system of property rights. Discuss the logic of this argument.

5. Discuss the challenges facing intellectual property law in the digital age.