Many externalities arise from poorly defined property rights.

Name: Many externalities arise from poorly defined property rights.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When property rights are not well-defined, individuals may not have the incentive to take into account the costs or benefits of their actions on others. This can lead to externalities, such as pollution, overuse of common resources, or underinvestment in public goods. By contrast, clearly defined property rights help to align incentives and promote efficient outcomes.

Many Externalities Arise from Poorly Defined Property Rights