Fairness and the Optimal Allocation of Ownership Rights

We report on several experiments on the optimal allocation of
ownership rights. The experiments confirm the property rights
approach by showing that the ownership structure affects
relationship-specific investments and that subjects attain the most
efficient ownership allocation despite starting from different
initial conditions. However, in contrast to the property rights
approach, the most efficient ownership structure is joint
ownership. These results are neither consistent with the
self-interest model nor with models that assume that all people
behave fairly, but they can be explained by the theory of inequity
aversion that focuses on the interaction between selfish and fair
players.