Fairness and the Optimal Allocation of Ownership Rights

Ernst Fehr (), Susanne Kremhelmer () and Klaus M. Schmidt ()

No CESifo Working Paper No. 1467, CESifo Working Paper Series from CESifo Group Munich

Abstract: We report on several experiments on the optimal allocation of ownership rights. The experiments confirm the property rights approach by showing that the ownership structure affects relationship-specific investments and that subjects attain the most efficient ownership allocation despite starting from different initial conditions. However, in contrast to the property rights approach, the most efficient ownership structure is joint ownership. These results are neither consistent with the self-interest model nor with models that assume that all people behave fairly, but they can be explained by the theory of inequity aversion that focuses on the interaction between selfish and fair players.

Keywords: ownership rights; double moral hazard; fairness; reciprocity; incomplete contracts (search for similar items in EconPapers)
JEL-codes: C70 C90 J30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cbe, nep-exp and nep-soc
Date: 2005
View list of references View citations in EconPapers

Downloads: (external link)
http://www.cesifo-group.de/DocCIDL/cesifo1_wp1467.pdf (application/pdf)

Related works:
Working Paper: Fairness and the Optimal Allocation of Ownership Rights
Working Paper: Fairness and the Optimal Allocation of Ownership Rights (2005)
Working Paper: Fairness and the Optimal Allocation of Ownership Rights (2004)
Working Paper: Fairness and the Optimal Allocation of Ownership Rights (2005)
Journal Article: Fairness and the Optimal Allocation of Ownership Rights (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ces:ceswps:_1467

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Group Munich
Address: Poschingerstrasse 5, 81679 Munich
Series data maintained by Julio Saavedra ().