TY  - JOUR
AU  - Polinsky,A. Mitchell
TI  - On the Choice Between Property Rules and Liability Rules
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 286
PY  - 1980
Y2  - December 1980
UR  - http://www.nber.org/papers/w0286
L1  - http://www.nber.org/papers/w0286.pdf
N1  - Author contact info:
A. Mitchell Polinsky
Stanford Law School
Stanford University
Stanford, CA  94305
Tel: 650/723-0886
Fax: 650/723-3557
E-Mail: polinsky@stanford.edu
AB  - When parties can bargain with each other in an externality situation, it is frequently argued that liability rules are preferable to property rules. The case for liability rules is thought to be strongest when the parties behave strategically, when the collective authority responsible for maximizing social welfare has perfect information, and when lump-sum transfers are not available. It is shown here that liability rules are not generally preferable to property rules in these circumstances because of their limited ability to redistribute income between the parties.
ER  -