ELEMENTS B POWER POINT SLIDES Class #13 Monday, September 21, 2015

ELEMENTS B POWER POINT SLIDES

Class #13Monday, September 21, 2015

MUSIC: Tchaikovsky Symphony #4 (1880)Berlin Philharmonic (2003)Conductor: Von Karajan

Lunch TodayMeet on Bricks @ 11:55

Brummond * Burch, Jil.Dubins* Moe

Smilanich * Solares

Lunch ThursdayMeet on Bricks @ 12:25

Calles Smith * CastilloCisneros* GrigoryanHernandez * Karlin

Lopez

DEMSETZ FIRST THESIS

ContinuedME & KRYPTONKRYPTON:

DQ1.36


New property rights tend to develop “when the gains of

internalization become larger than the cost of

internalization.”

DEMSETZ FIRST THESIS: Basic Analysis

• Identify decision at issue• Identify old rule• Identify neg. externalities under old rule• Identify change in circumstances• Does change increase neg. externalities [or

perception of harm]?• If cost of externalities > cost of change change

in ruleWe’ll Come Back to Repeatedly in

Subsequent DQs

DEMSETZ FIRST THESIS: DQ1.36 (b) DEVELOPMENT OF LEGAL

CLAIMS RE SEXUAL HARASSMENT • Decision/activity at issue: Male bosses demand

sex from women as job condition • Old rule: Legal/No Liability• Identify neg. externalities under old rule• Identify change in circumstances• Does change increase neg. externalities [or

perception of harms]?• If cost of externalities > cost of change change

in rule

DEMSETZ FIRST THESIS: DQ1.36(c) (Shack v. State)

KRYPTONKRYPTON• Decision/activity at issue: Limit access to MWs

living/working on your farm• Old rule: Allowed• Identify neg. externalities under old rule.• Change in circumstances?:

DEMSETZ FIRST THESIS: DQ1.36(c) (Shack v. State)

KRYPTONKRYPTON• Decision/activity at issue: Limit access to MWs

living/working on your farm• Old rule: Allowed• Neg. externalities: Poor Working Conditions• Change in circumstances? “Harvest of Shame”

Federal Programs to aid MWs. • Does change increase neg. externalities [or

perception of harms]?• If cost of externalities > cost of change change

in rule


New property rights tend to develop “when the gains of internalization

become larger than the cost of internalization.”

•Useful description of how legal change can occur.

•Going forward, can use to argue that legal change should occur b/c social changes have greatly increased negative externalities.


New property rights tend to develop “when the gains of internalization

become larger than the cost of internalization.”

•Useful description of how legal change can occur•Can use to argue that legal change should occur

Questions?

DEMSETZ SECOND THESIS

DQ1.37-1.40ME & RADIUMRADIUM (1.39)


Over Time, Process Described in 1st Thesis

Leads to More and Stronger Private Property

Rights


Over Time, Process Described in 1st Thesis Leads to More and

Stronger Private Property Rights

As Opposed to What?

DEMSETZ SECOND THESISDQ1.37

Alternatives to Private Property 1.State of Nature: (Can Use Power/Force to Exclude Others)• Common Law re Rights among Family

Members• Fairly Uncommon Today

DEMSETZ SECOND THESISDQ1.37

Alternatives to Private Property 1.State of Nature: (Can Use Physical Force to Exclude)2.Communal Ownership • No one can exclude others completely• In practice, often variants of First in Time• Common Examples• Access to Public Streets, Public Parks, Beaches, etc.• Use of Oxygen in Air; Use of Water from Public Sources

DEMSETZ SECOND THESISDQ1.37: URANIUM

Alternatives to Private Property 1.State of Nature: (Can Use Force to Exclude)2.Communal Ownership (Can’t Exclude/1st-in-Time)3.Can Have Non-Communal State Ownership • Like Private Property BUT Gov’t Management• E.g., Military Bases

DEMSETZ SECOND THESIS: DQ1.37

Gradations of Private Property Communal : Examples (Pretty Strong Private Rights)

(1) Songs under copyright:• Can’t perform for $$ or copy text w/o permission/$$• Can’t limit singing in shower, etc.

(2) Farmers’ Land after State v. Shack• Can exclude most people for most purposes• Limits on right to exclude to meet needs of MWs


Gradations of Private Property Communal : Examples (Pretty Weak Private Rights)

(1) Perfumes, Clothing Designs:• Anyone can copy formula/design & sell• Can’t lie about source (private property in

trademark).

(2) Air• Generally anyone can use oxygen, nitrogen, etc.• Some limits on use if creates identifiable pollution



Stronger Private Property Rights

Why? Demsetz: Private Property More Efficient

Than Communal Property


Private Property More Efficient Than Communal Property (Results in Fewer Externalities)

1.Members of community will have trouble negotiating among themselves to achieve optimal level of resource use.



1.Members of community will have trouble negotiating to achieve optimal level of resource use. • Claim: Private Os more likely to manage resource in way

to maximize long term benefits.• In communal or state, no individual reaps benefits of

good management, so have to do difficult group negotiation to get everyone to agree to steps needed to achieve optimum. (High transaction costs)



2. The members of the community will have trouble negotiating with other communities or outsiders: • to prevent interference with community’s

rights • to achieve useful bargains



2.The members of the community will have trouble negotiating with other communities or outsiders: • Standard problems of group bargaining • Plus difficulty of figuring out who to bargain with (Who

do I talk to if I want to buy up all the oxygen or to prevent some people from overusing oxygen?)

DEMSETZ SECOND THESISDQ1.39 RADIUM

Demsetz: Private Property More Efficient Than Communal Property

In your experience, what ways do communities have of preventing anti-community behavior aside from bargaining or paying off the anti-

social community members?


Demsetz: Private Property More Efficient Than Communal Property

Reasons to Question Claim•May understate effectiveness of social sanctions/ ostracism/self-help as ways for communities to regulate behavior w/o negotiation. E.g., • Law school sections• Fast food containers• Celebrities, NFL & Twitterverse

DEMSETZ SECOND THESISPrivate Property More Efficient Than

Communal Property (Reasons to Q Claim)•May understate effectiveness of social sanctions•Not always clear that private property yields better management. Individuals …• may be irrationally wasteful • may sacrifice long term value for short term gains • may rationally place low value on consequences in

distant future (time value of money)

DEMSETZ SECOND THESISPrivate Property More Efficient Than

Communal Property (Reasons to Q Claim)•May understate effectiveness of social sanctions•Not always clear that private property yields better management• Individuals may not value future benefits highly• Sometimes concerned community (e.g., re children or

future generations) can do better job planning for future

DEMSETZ SECOND THESISPrivate Property More Efficient Than Communal

Property (Reasons to Q Claim)•May understate effectiveness of social sanctions•Not clear private property yields better management

•DQ1.40: If bargaining among community is so difficult, how do private property systems get created?• Shows some group negotiation possible• Although Demsetz would say overcoming high

transaction costs very hard so only occurs if perceived costs of retaining status quo very high



More Private Property

Assuming Private Property Results in Fewer Externalities …


Over Time, Process Described in 1st Thesis Leads to More and More

Private Property

• If Externalities High Change in Rule



Private Property

• If Externalities High Change in Rule • Rule Changes Unpredictable



Private Property


– If to Private Property, Low Externalities = Stable



Private Property


– If to Private Property, Low Externalities = Stable– If not, Higher Externalities More Change


DEMSETZ: WHAT TO TAKE AWAY

•Externalities = Important Idea

• Very Commonly Referenced Concept• Want Decision-Makers to Consider Real Costs


•Externalities Important•1st Thesis:• Useful Description of How Changes in Society Can

Create Changes in Property Rights• Can also use to argue change is needed b/c of

high externalities


•Externalities Important•Useful Description of a Way Changes in Society Create Changes in Property Rights•Arguments re Advantages of Private Property (or of Stronger Private Property Rights)


ALSO (though we didn’t spend time on):

1st para.: Description of What Property Is (useful here & for Property class)

•Expectations re Rights to Act•Protection from Others’ Interference•Construct of Particular Society/Culture


What Counts as Property = Construct of Particular Society/Culture

LOGISTICS: CLASS #13ASSIGNMENTS DUE THIS WEEK

Double-check all instructions before finalizing.

•ALL: Group Assmt #1 Due Today @ 10 pm•KRYPTON: Albers Brief Due Thurs @ 10pm• URANIUM : Kesler Brief Due Sat @ 8 pm• For Briefs: Use Self-Quizzes for All Escape Cases• Manning Brief Posted After Class Today• Mullett Brief Posted After Class Friday

LOGISTICS: CLASS #13• POSTED ON COURSE PAGE• Course Materials: Unit Two (Part 1: Whaling Cases)• Updated Syllabus & Assignment Sheet to 10/10

(Including adjustment again to where we are).

• No Class Wednesday (Yom Kippur)

• DF FRIDAY: 1st 20 Minutes: Emily Horowitz (Ask Us) will Discuss Exam Software

• RADIUM BRIEFS: STATUS UPDATE

Introduction to Mullett v. Bradley

IN-CLASS CASE BRIEF: IN-CLASS CASE BRIEF: KRYPTONKRYPTON

Mullett v. Bradley BRIEF: KRYPTON

Statement of the Case:

Mullett … ???sued Bradley … for [cause of action]seeking [remedy]


Statement of the Case:Mullett, original owner of an escaped sea

lion, sued Bradley … ???for [cause of action]seeking [remedy]


Statement of the Case:Mullett, OO of an escaped sea lion, sued Bradley, who purchased the animal

from its finder for [cause of action] … ???seeking [remedy]


Statement of the Case:Mullett, OO of an escaped sea lion, sued

Bradley, who purchased the animal from Ffor conversion (1st sentence of case)seeking [remedy] … ???


Statement of the Case:Mullett, OO of an escaped sea lion, sued

Bradley, who purchased the animal from F, for conversion seeking damagesseeking damages. (1st sentence of case)


Procedural Posture:The lower court dismissed the complaint.

The plaintiff appealed. After a Trial or on a Dispositive Motion?

How do you know?


Procedural Posture: The lower court dismissed the complaint afterafter

a triala trial. The plaintiff appealed. • “The complaint was dismissed on the meritson the merits.” (Top p.43)

• Statements referring to evidence and proof, e.g., “The evidenceevidence not only fails to show that there was any animus revertendi on its part, but the inference from the facts proventhe facts proven is quite the contrary.” (Long para. mid-p.43)


Facts Relevant to Analysis:Court’s analysis makes no mention of capture,

transport, blemishes, rejection by buyer, so we can start with …

• P placed sea lion he owned on island … • What’s Next ?

Mullett v. Bradley BRIEF: KRYPTONFacts Relevant to Analysis:

• P placed sea lion he owned on island. Sea lion escaped. P made no effort to recapture it.

• Fisherman found sea lion 2 weeks later, 70+ miles from the island. Fisherman sold it to D.

• A year later, plaintiff recognized the sea lion and demanded its return. D refused.ADDITIONAL FACT NOT FOUND IN FACT

SECTION OF OPINION?

Mullett v. Bradley BRIEF: KRYPTONFacts Relevant to Analysis:

• Sea lions are native to Pacific Ocean; not found in the Atlantic.

• P placed sea lion he owned on island in Atlantic. Sea lion escaped. P made no effort to recapture it.

• Fisherman found sea lion in Atlantic 2 weeks later, 70+ miles from the island. Fisherman sold it to D.

• A year later, plaintiff recognized the sea lion and demanded its return. D refused.

Mullett v. Bradley

• “Fish-pound” is submerged net for catching fish (as in Shaw)• Could call this sea lion “Thomas” b/c taking fish out of nets

belonging to others.• We’ll return to Mullett on Friday

MANNING BRIEF Continued

Manning v. Mitcherson:

BRIEFISSUE (Procedural Part):

Did the magistrate err in awarding possession of the canary to the original owner …

ORDid the Superior Court err by affirming the

judgment of the magistrate awarding possession of the canary to the original owner …

Manning v. Mitcherson:

BRIEFISSUE (Adding Substantive Part):

Did the magistrate err in awarding possession of the canary to the original owner …

because an OO retains property rights to an escaping animal where [facts].

Manning v. Mitcherson:BRIEF

ISSUE NARROW HOLDINGDid the magistrate err in awarding possession of the canary to the original owner because an OO retains property rights to an escaping animal where [facts].

The magistrate didn’t err in awarding possession of the canary to the original owner because an OO retains property rights to an escaping animal where [facts].

We’ll Insert List of Facts from p. 40 (2d Paragraph) + Distinctive Crest

Manning v. Mitcherson:FACTS & HOLDING

The original owner retains property rights in an escaped [canarycanary] …

[that had distinctive crest] [that responded to its name] [that had escaped and returned once before] [that had been owned for two years][that had been missing for only five days][that OO located day after it was found]

NARROWING/BROADENING HOLDINGS

• Narrowest Version of Holding Essentially Includes All Facts of Present Case

• Broader Versions Address More Future Cases Because Less Specific


• Narrowest Version of Holding Essentially Includes All Facts of Present Case

• Broader Versions Address More Future Cases

• Broaden Holding by (either or both of):– Making Descriptions of Some Facts More General– Eliminating Some Facts


• Narrowest Version Essentially Includes All Facts of Case• Broad Versions Address More Future

Cases• Different Versions of Broad Holdings – Play With to See What Case Might Stand For

Going Forward– Remember Acceptable Formulations Must be

Consistent with Result & Language of Case

Manning v. Mitcherson:BROADENING HOLDING:

ExampleThe original owner retains property rights in an escaped [canarycanary] [animal animal ferae ferae naturaenaturae]

[that had distinctive crest] [that responded to its name] [that had escaped and returned once before] [that had been owned for two years][that had been missing for only five days][that OO located day after it was found]

MANNING: From Facts to Relevant Factors

DQ1.46 & Broader & Narrower Holdingsfeaturing

OXYGENOXYGEN

Manning v. Mitcherson: DQ1.46

Relevant Factors (OXYGENOXYGEN)We’ll discuss the possible significance of each fact, including…

How Might You Broaden a Particular FactFact to a More General FactorFactor? (to imagine what might be part of broader versions of holding)

Why Might that Factor Matter in Determining Rights between OO and Finder? (to clarify purpose/relevance)

How Well Does the Particular Fact Further the Purposes of Considering the General Factor ? (to assess the relative importance of the fact and prepare to compare it to facts of future cases/problems)


Relevant Factors (OXYGENOXYGEN)The original owner retains property rights in an escaped animal ferae naturae …

• that had distinctive crest … • Possible Significance?– Possible more general factor?– Why might matter to rights of OO/F?


Relevant Factors (OXYGENOXYGEN)Possible Significance of …

that had distinctive crest marked• May help identify animal• May provide notice to F of prior claim• [May also show taming or emotional bond;

we’ll discuss with name & escape/return.]

How well does crest here do these things?

Manning v. Mitcherson:FACTS & HOLDING

The original owner retains property rights in an escaped [canary] [animal ferae naturae]

[that had distinctive crest] [that was marked]

[that responded to its name] [that had escaped and returned once before] [that had been owned for two years][that had been missing for only five days][that OO located day after it was found]


Relevant Factors (OXYGENOXYGEN)The original owner retains property rights in an escaped animal ferae naturae …

• that responded to its name• that had escaped and returned once before• Possible Significance?– Possible more general factor? – Why might matter to rights of OO/F?


Relevant Factors (OXYGENOXYGEN)Possible Significance of …responded to name + Prior escape/return

tamed or bonded• Shows labor by OO (or prior owner)• May want to protect emotional connection

How well does responding to name do these things here?

Documents

ELEMENTS B POWER POINT SLIDES Class #13 Monday, September 21, 2015