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10 - Good-Faith Purchase

Proposing Fractional Ownership and Internal Auction

from Part III - Movable Property

Published online by Cambridge University Press:  18 May 2023

Yun-chien Chang
Affiliation:
Cornell Law School, New York
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Summary

Chapter 10 identifies 21 variants of the good-faith purchase doctrine, which are often different combinations of several key factors. That said, none of the 21 schemes are the most efficient. Among the forms of good-faith purchase doctrine currently in use, the market overt rule comes closest to ex ante efficiency because original owners, merchant dealers, and consumers all have incentives to spend close to optimal costs on verification and prevention, and the movables in question are more likely to be in the hands of higher valuers. Drawing on mechanism design literature, Chapter 10 argues that when both an original owner and a consumer are non-negligent, the two parties can be assigned 50% shares of the movable in question, and an ensuing internal auction between them can ex post tease out who values the resource more. This internal auction design is inexpensive to administer.

Type
Chapter
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Property Law
Comparative, Empirical, and Economic Analyses
, pp. 259 - 288
Publisher: Cambridge University Press
Print publication year: 2023

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  • Good-Faith Purchase
  • Yun-chien Chang, Cornell Law School, New York
  • Book: Property Law
  • Online publication: 18 May 2023
  • Chapter DOI: https://doi.org/10.1017/9781009236553.014
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  • Good-Faith Purchase
  • Yun-chien Chang, Cornell Law School, New York
  • Book: Property Law
  • Online publication: 18 May 2023
  • Chapter DOI: https://doi.org/10.1017/9781009236553.014
Available formats
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To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

  • Good-Faith Purchase
  • Yun-chien Chang, Cornell Law School, New York
  • Book: Property Law
  • Online publication: 18 May 2023
  • Chapter DOI: https://doi.org/10.1017/9781009236553.014
Available formats
×