Freedom of Contract and the Laws of Entropy
38 Pages Posted: 14 Feb 2002
Abstract
In this paper I consider the twofold relationship between freedom of contract and entropy in property. Recent literature on property fragmentation suggests that property is subject to a fundamental law of entropy, leading towards increasing property fragmentation. After considering the legal responses to the problem of entropy, I revisit the above debate considering the relevance of freedom of contract to achieve optimal outcomes in a world of imperfect information and positive transaction costs. In such a context, I discern two analytically distinct ways in which freedom of contract contributes to minimizing the problems of entropy. I conclude that entropy is not an ontological problem, but is often the byproduct of the uncoordinated use of institutional and legal constraints on free contractual arrangements.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Duality in Property: Commons and Anticommons
By Francesco Parisi, Ben Depoorter, ...
-
Fragmentation in Property: Towards a General Model
By Norbert Schulz, Francesco Parisi, ...
-
Fair Use and Copyright Protection: A Price Theory Explanation
By Ben Depoorter and Francesco Parisi
-
By Hanoch Dagan and Michael Heller
-
Perpetual Restrictions on Land and the Problem of the Future
-
Tragically Difficult: The Obstacles to Governing the Commons