If transactions costs are high and the number of individuals involved is large,initial assignment of property rights is important to economic efficiency.

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When transactions costs are high and the number of individuals involved is large, it can be difficult to negotiate and enforce efficient agreements. In these situations, clear property rights can help reduce transaction costs and encourage economic efficiency. By establishing clear ownership and rights, individual parties have stronger incentives to invest in the property and use it in a way that maximizes its value, leading to better outcomes for everyone involved.

If Transactions Costs Are High and the Number of Individuals