Property Regimes as Information Regimes: Efficiency and Economies of Joint Production

Abstract

The paper argues that it is useful to view property regimes asinformation regimes. A conceptual model and numerical example are usedto show that, under some reasonable assumptions, a common propertyregime is preferable to a private property regime when property regimesare viewed as information regimes. The paper considers a case ofidiosyncratic risk in a dynamic grazing context where the marginality ofthe resource is such that insurance markets are thin or non-existent.Agents are thought to be risk averse and exogenous enforcement of a risksharing scheme is not feasible. The policy implication is that theestablishment and maintenance of a common property regime is shown to bea (possibly) reasonable institutional response in the face of difficultand particular circumstances when property regimes are viewed asinformation regimes.