ABSTRACT
With weak property rights – imperfectly enforced property rules and liability rules with low damages – there is a concern about wasteful taking wars, namely, a party might take another’s good, neglecting that the good will ultimately be taken back. Such taking wars would not occur with unbounded cognition, since it is irrational to engage in costly taking if the taker anticipates that the original owner will end up with the good. But wasteful taking might well occur with bounded cognition. This experiment shows that bounded cognition does indeed fuel taking wars. This result supports the theoretical argument in favor of strong property rights, which preclude taking wars regardless of any cognitive limits.
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Oren Bar-Gill and Christoph Engel, Bounded Cognition and the Taking of Personal Property: An Experiment, American Law and Economics Review. Published: 13 October 2026.
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