Is it possible that the presence of welldefined and enforced

Is it possible that the presence of well-defined and enforced private property rights in goods might actually cause problems rather than solve them (the tragedy of the anticommons)? Explain how. What kinds of goods might be relevant here?

Solution

Tragedy of anticommons:

Private property rights implies no person could make use of any resource without obtaining permission of owner.a tragedy of the anticommons occurs when a resource is underused because it has been divided up by a number of owners who may not be willing to agree or cooperate with one another.

The anticommons leads to underuse and waste. Property rights need to be limited to be effective.

For example: drug patenting, telecom licensing, climate change, compulsory land purchase, oil field unitisation, music and art copyright, and post-socialist economic transition. Fixing anticommons tragedy is a key challenge for any legal system committed to innovation and economic growth.

Once an anticommons property appears, it is difficult to convert it into useful private property either through market means or subsequent regulation due to transaction costs, holdouts, and individual attempts to extract the greatest return.