When private bargaining is costly, courts tend to assign property rights:
A)to those parties likely to generate the highest social wealth.
B)to those parties able to pay the highest bribes.
C)to those parties likely to generate the highest private wealth.
D)to those parties having the largest political clout.

Question

Quizplus · Accepted Answer

When private bargaining is costly, courts tend to assign property rights to those parties likely to generate the highest social wealth. This means that the courts prioritize the party that can create the most value for society as a whole, rather than simply looking at the parties that can generate the most private wealth or have the most political power. By assigning property rights in a way that leads to the highest social wealth, the court is able to maximize overall welfare and avoid the inefficiencies that can arise from costly private bargaining.

When Private Bargaining Is Costly, Courts Tend to Assign Property