W.C. Bunting


This Article models private ownership as a conflict resolution mechanism and contends that for the Coase Theorem, as narrowly defined in this Article, to be consistent, private ownership must yield the Pareto- optimal use of scarce resources among all feasible conflict resolution mechanisms. Conflict over a scarce resource may be better resolved, however, by eliminating the possibility of private ownership and “forcing” disputing parties to share ownership of the contested resource. A corollary to the Coase Theorem is introduced which states: In the absence of transaction costs, the distribution of private and shared ownership is efficient. Further, assuming transaction costs are high and shared ownership is socially optimal, a role for the courts is suggested wherein de facto shared ownership is established by courts rendering private property rights random or unclear—judicial behavior that stands in sharp contrast to the normative implications of the Coase Theorem.