MUSIC: Tchaikovsky Symphony #4 (1880) Berlin Philharmonic (2003) Conductor: Von Karajan §B Lunch Wed Sep 17 Meet on 12:15 Centurion * P.Comparato Fernandez * Haverman Jackson* Maddox Teijelo §B Lunch Thu Sep 18 Meet on 11:55 Aldahan * Gomez Gonzalez * Kropkof Partin * Spain * Stafford

DEMSETZ ARTICLE

DEMSETZ SECOND THESIS Over Time, Process Described in 1 st Thesis Leads to More and Stronger Private Property Rights Why? Demsetz: Private Property More Efficient Than Communal Property

DEMSETZ SECOND THESIS: DQ1.38 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.

DEMSETZ SECOND THESIS: DQ1.38 Private Property More Efficient Than Communal Property (Results in Fewer Externalities) 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.

DEMSETZ SECOND THESIS: DQ1.38 Private Property More Efficient Than Communal Property (Results in Fewer Externalities) 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

DEMSETZ SECOND THESIS: DQ1.38 Private Property More Efficient Than Communal Property (Results in Fewer Externalities) 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 THESIS DQ1.39 URANIUM 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 SECOND THESIS: DQ1.39 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 NFL & Twitterverse

DEMSETZ SECOND THESIS: DQ1.39 Private 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 can be irrationally wasteful or may sacrifice long term value for short term gains Sometimes concerned community (e.g., re children or future generations) can do better job planning for future

DEMSETZ SECOND THESIS: DQ1.39 Private Property More Efficient Than Communal Property (Reasons to Q Claim) May understate effectiveness of social sanctions Not clear private property yields better management If bargaining among community is so difficult, how do private property systems get created? Shows some group negotiation possible Although Demsetz would say overcoming transaction costs hard so only occurs if perceived costs of status quo very high

DEMSETZ SECOND THESIS Over Time, Process Described in 1 st Thesis Leads to More and More Private Property Assuming Private Property Results in Fewer Externalities …

DEMSETZ SECOND THESIS Over Time, Process Described in 1 st Thesis Leads to More and More Private Property If Externalities High  Change in Rule

DEMSETZ SECOND THESIS Over Time, Process Described in 1 st Thesis Leads to More and More Private Property If Externalities High  Change in Rule Rule Changes Unpredictable

DEMSETZ SECOND THESIS Over Time, Process Described in 1 st Thesis Leads to More and More Private Property If Externalities High  Change in Rule Rule Changes Unpredictable – If to Private Property, Low Externalities = Stable

DEMSETZ SECOND THESIS Over Time, Process Described in 1 st Thesis Leads to More and More Private Property If Externalities High  Change in Rule Rule Changes Unpredictable – If to Private Property, Low Externalities = Stable – If not, Higher Externalities  More Change

DEMSETZ SECOND THESIS Over Time, Process Described in 1 st Thesis Leads to More and More Private Property If Externalities High  Change in Rule Rule Changes Unpredictable – If to Private Property, Low Externalities = Stable – If not, Higher Externalities  More Change QUESTIONS?

DEMSETZ: WHAT TO TAKE AWAY Externalities Important Very Commonly Referenced Concept Want Decision-Makers to Consider Real Costs

DEMSETZ: WHAT TO TAKE AWAY Externalities Important 1 st 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

DEMSETZ: WHAT TO TAKE AWAY 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)

DEMSETZ: WHAT TO TAKE AWAY ALSO (though we didn’t spend time on): 1 st 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

DEMSETZ: WHAT TO TAKE AWAY What Counts as Property = Construct of Particular Society/Culture

LOGISTICS: CLASS #14 RADIUM: Shaw Briefs Available for Pick-Up from Ms. Sutton (One Packet per Team) RADIUM: Shaw Briefs Available for Pick-Up from Ms. Sutton (One Packet per Team) KRYPTON: Albers Brief Due Sun 9pm ALL: Assignment #1 Due Sun 2pm References to Earlier Cases OK Only for Labor Sub- Assignment (but not Necessary) Questions on Assignments?

Manning v. Mitcherson IN - CLASS CASE BRIEF : KRYPTON

Manning v. Mitcherson : BRIEF : KRYPTON STATEMENT OF THE CASE : Mitcherson … ? sued Manning, … [theory of case] [remedy requested]

Manning v. Mitcherson : BRIEF : KRYPTON STATEMENT OF THE CASE : Mitcherson, original owner (OO) of escaped canary sued Manning, … ? [theory of case] [remedy requested]

Manning v. Mitcherson : BRIEF : KRYPTON STATEMENT OF THE CASE : Mitcherson, OO of escaped canary sued Manning, who was given the bird by its finder, [theory of case]? [remedy requested]

Manning v. Mitcherson : BRIEF : KRYPTON STATEMENT OF THE CASE : Mitcherson, OO of escaped canary sued Manning, who was given the bird by finder, under a “possessory warrant” = summary action for return of personal property

Manning v. Mitcherson : BRIEF : KRYPTON STATEMENT OF THE CASE : Mitcherson, OO of escaped canary sued Manning, who was given the bird by finder, under a possessory warrant – not “conversion” b/c not asking for $$ – not crazy to say “replevin” but poss. warr. appears to be its own cause of action in Ga. [remedy requested]?

Manning v. Mitcherson : BRIEF : KRYPTON STATEMENT OF THE CASE : Mitcherson, OO of escaped canary sued Manning, who was given the bird by finder, under a possessory warrant … For return of the bird. (Sweet!!)

Manning v. Mitcherson : BRIEF : KRYPTON PROCEDURAL POSTURE : After a trial, the magistrate awarded possession to the Plaintiff. Need to include “After a trial” to clarify not decided: on pleadings (like Pierson) on Directed Verdict (like Liesner & Shaw)

Manning v. Mitcherson : BRIEF : KRYPTON PROCEDURAL POSTURE : After a trial, the magistrate awarded possession to the Plaintiff. Defendant brought a writ of certiorari to Superior Court, which affirmed [by dismissing the writ]. Defendant “excepted” [appealed]. ISSUE ( Procedural Part )?

Manning v. Mitcherson : BRIEF : KRYPTON ISSUE ( Procedural Part ): Did the magistrate err in awarding possession of the canary to the original owner … OR Did the Superior Court err by affirming the judgment of the magistrate awarding possession of the canary to the original owner ISSUE ( Substantive Part )?

Manning v. Mitcherson : BRIEF : KRYPTON ISSUE ( Substantive Part ): Did the magistrate err in awarding possession of the canary to the original owner because an OO loses property rights to an escaping animal where [facts].

Manning v. Mitcherson : BRIEF : KRYPTON ISSUE  NARROW HOLDING Did the magistrate err in awarding possession of the canary to the original owner because an OO loses 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 : KRYPTON canary The original owner retains property rights in an escaped [canary] … [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

NARROWING/BROADENING HOLDINGS 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 References to Some Facts More General – Eliminating Some Facts

NARROWING/BROADENING HOLDINGS 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 Must be Consistent with Result & Language of Case

Manning v. Mitcherson : FACTS & HOLDING : KRYPTON canaryanimal ferae naturae The original owner retains property rights in an escaped [canary]  [animal ferae naturae] [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 v. Mitcherson DQ 1.46 ( Relevant Factors ): OXYGEN

Manning v. Mitcherson : DQ 1.46 Relevant Factors ( OXYGEN ) We’ll discuss the possible significance of each fact, including…  How Might You Broaden a Particular Fact to a More General Factor? (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)

Manning v. Mitcherson : DQ 1.46 Relevant Factors ( OXYGEN ) 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?

Manning v. Mitcherson : DQ 1.46 Relevant Factors ( OXYGEN ) Possible Significance of … that had distinctive crest  marked May help identify animal May provide notice to F of prior claim 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]

Manning v. Mitcherson : DQ 1.46 Relevant Factors ( OXYGEN ) 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?

Manning v. Mitcherson : DQ 1.46 Relevant Factors ( OXYGEN ) Possible Significance of … responded to name + Prior escape/return  tamed or bonded Shows labor by OO May want to protect emotional connection How well does responding to name do these things here?

Manning v. Mitcherson : DQ 1.46 Relevant Factors ( OXYGEN ) Possible Significance of … responded to name + Prior escape/return  tamed or bonded Shows labor by OO May want to protect emotional connection How well does prior escape/return do these things here?

Manning v. Mitcherson : FACTS & HOLDING canaryanimal ferae naturae The original owner retains property rights in an escaped [canary]  [animal ferae naturae] [that had distinctive crest]  [that was marked] [that had escaped and returned once before] + [that responded to its name]  [that was tamed] [that had been owned for two years] [that had been missing for only five days] [that OO located day after it was found]

Manning v. Mitcherson : DQ 1.46 Relevant Factors ( OXYGEN ) The original owner retains property rights in an escaped animal ferae naturae … Note Three Different Measures of Time [that had been owned for two years] [that had been missing for only five days] [that OO located day after it was found]

Manning v. Mitcherson : DQ 1.46 Relevant Factors ( OXYGEN ) Possible Significance of … that had been owned for two years  – Taming/Bonding again – Maybe stronger than name or escape/return: More labor by OO (2 years maintenance) Emotional connection probably strong

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

Manning v. Mitcherson : DQ 1.46 Relevant Factors ( OXYGEN ) The original owner retains property rights in an escaped animal ferae naturae … that had been missing for only five days that OO located day after it was found Possible Significance? – Possible more general factor? – Why might matter to rights of OO/F?

Manning v. Mitcherson : DQ 1.46 Relevant Factors ( OXYGEN ) Possible Significance of … missing only five days/OO located day after found  Gone very short time Shows pursuit/interest by OO Little time for F to invest or bond How well does time here show 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] [prior escape/return] + [responded to name] + [owned for two years]  [that was tamed & emotionally bonded to OO] [that had been missing for only five days] + [that OO located day after it was found]  [that had been gone for a short time]

Manning v. Mitcherson : VERSIONS OF HOLDING (1 ) The original owner retains property rights in an escaped bird that had escaped and returned before, is distinctively marked, had been found only a short time after it escaped, and was located by the owner a short time after being found.

Manning v. Mitcherson : VERSIONS OF HOLDING (2 ) The original owner retains property rights in an escaped animal ferae naturae that is tamed and distinctively marked.

Manning v. Mitcherson : VERSIONS OF HOLDING (3 ) The original owner retains property rights in an escaped animal ferae naturae where the OO is emotionally bonded to the animal and locates the animal after it only is gone for a short time.

Manning v. Mitcherson : MANY VERSIONS OF HOLDING Exact scope of Manning holding necessarily unclear until Ga. Supreme Court clarifies Use other language from case to help determine best alternatives (DQ1.45 & 1.47) Use squirrel hypothetical to see how different versions might accomplish different results (DQ1.48) QUESTIONS ON FACTORS & HOLDING?