parent nodes: business judgment | Calabresi corollary | Coase Theorem | Criminal Law | duty of loyalty | entitlement | Epstein restatement | injunction | necessity | Richards v Richards | strict liability | Torts Theories
property rule
An entitlement that can only be transferred or destroyed through bargaining; property rules are more efficient than liability rules where:(1) actors have subjective valuations of their entitlements
and (2) transaction costs are suffciently low to allow bargaining
Property rules are protected by criminal sanctions because of the actors' different valuation; there is no guarantee, for example, that a "transaction" between a thief and a victim will be Pareto-optimal.
An injunction can act as a property rule, depending on the injunction's contemplation of future damages or noncompliance, as well as the possibility of post-judgment bargaining.
See Calabresi corollary to the Coase Theorem.
See also Epstein restatement of the Coase Theorem