Effective and Efficient Organisations? by Iris A. Hauswirth

By Iris A. Hauswirth

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They define who has which decision rights about a good. Property rights also 'specifi how a person may be benefited or harmed' by their own decisions, or decisions of others who hold some decision rights over the good (Demsetz 1967:347). Combined with the notion of REMMs, this can lead to individual choices that are ineffective or inefficient from a group's, or society's perspective: 2) REMMs and 'extemal effects' Resourceful, Evaluating, Maximising individuals will use their decision rights to choose those actions, from which they expect a net benefit for themselves.

Tariff barriers on certain products; subsidies) but have negative effects overall. Because of that, the adaptability of property rights structures to certain changes depends largely on how they are structured at present Libecap (1988) found evidence for these points in four case studies of natural resources property rights change in the US. The property rights that were developed and maintained despite alternatives that appeared to be more rational, depended on the preferences of the individual bargaining parties, and on the details of the bargaining process.

His valuation of specific goods is relative, which means that depending on how much he already has of one in comparison to others, he values an additional unit more or less. (Meckling 1976:554f) Maximising: REMM uses her resourcefulness and evaluation ability to pick the option that promises the highest returns in the specific circumstances. But whereas Homo Economicus makes entirely rational choices because she has all relevant information and the capability to process it, REMM is only boundedly rational.

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