The Choice of Titling System in Land and the Blockchain

Bertrand Crettez () and Marie Obidzinski
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Bertrand Crettez: CRED - Centre de Recherche en Economie et Droit - UP2 - Université Panthéon-Assas

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Abstract: Should the advent of the blockchain lead to the reorganization or even the replacement of traditional land title registration systems? In addressing this issue we first generalize the model developed by Arrunada and Garoupa (2005) to study optimal land titling systems. Instead of considering only recording and registration alone, we examine an a priori infinite set of systems, each characterized by its quality (the probability that there is no forfeiture for a given plot of land) and its unit transaction cost. In this respect, the blockchain is viewed as a cost-efficient mechanism, albeit one potentially jeopardized by hacking. We find that, despite the introduction of the blockchain, under some reasonable assumptions it is still socially optimal to maintain traditional public registration. In that case, the optimal quality of protection provided by traditional registration must be either sufficiently high (and higher than that of the blockchain), or low enough (and lower than that of the blockchain). Yet under another set of assumptions, it is optimal to rely on the blockchain alone and to abandon traditional registration.

Keywords: Blockchain; Land titling; Forfeiture (search for similar items in EconPapers)
Date: 2021-07-15
New Economics Papers: this item is included in nep-agr and nep-pay
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