Property is only another name for decentralized creation of knowledge
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Eric A. Posner and E. Glen Weyl argue in a recent paper that a private property regime is incompatible with allocative efficiency insofar as it allows owners to ask for monopoly prices to potential buyers. In order to remedy this defect without penalizing investment efficiency, they propose to implement a Harberger tax. In this paper we show that the Harberger tax is a mechanism that penalizes the informational investment necessary to reach efficient estimates of the fundamental value of assets and, therefore, a mechanism that move us away from both investment efficiency and allocative efficiency.
KeywordsHarberger tax Property Efficiency Knowledge
JEL ClassificationD61 D83 H21
Compliance with ethical standards
This article does not contain any studies with human participants or animals performed by any of the authors.
No humans were involved and therefore informed consent was not needed.
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