Christopher Yoo, ‘Beyond Coase: Emerging Technologies and Property Theory’

Abstract:
In addition to prompting the development of the Coase Theorem, Ronald Coase’s landmark 1959 article on The Federal Communications Commission touched off a revolution in spectrum policy. Although one of Coase’s proposed reforms (that spectrum should be allocated through markets) has now become the conventional wisdom, his other principal recommendation (that governments stop dedicating portions of the spectrum to particular uses) has yet to be fully embraced. Drawing on spectrum as well as Internet traffic and electric power as examples, this Article argues that emerging technologies often reflect qualities that make defining property rights particularly difficult. These include the cumulative nature of interference, the presence of significant interdependencies, and the presence of significant geographic discontinuities in interference patterns, exacerbated by the localized nature of information. These technological considerations define the natural boundaries of property by creating transaction-free zones that must be encompassed within a single parcel. They also complicate defining property rights by making it difficult to identify and attribute harm to particular sources of interference. These challenges can make governance a more attractive solution than exclusion …

Yoo, Christopher S., Beyond Coase: Emerging Technologies and Property Theory (June 1, 2012). University of Pennsylvania Law Review, Vol. 160, p. 2189, 2012; U of Penn, Inst for Law & Econ Research Paper No. 13-16.

First posted 2013-05-11 17:28:48

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