Tragedy of the anticommons

The tragedy of the anticommons is a neologism coined by Michael Heller to describe a coordination breakdown where the existence of numerous rightsholders frustrates achieving a socially desirable outcome. The term mirrors the older term tragedy of the commons used to describe coordination breakdowns arising from insufficient rightsholders. ^[1] The concept covers a range of coordination failures including patent thickets, submarine patents, and nail houses.^{[citation needed]} Overcoming these breakdowns can be difficult, but there are assorted means including eminent domain, Laches, patent pools or other licensing organizations.^{[citation needed]}

The term originally appeared in Heller's 1998 article^[1] and is the thesis of his 2008 book.^[2] In a 1998 article^[3] in Science, Heller and Rebecca Eisenberg, while not disputing role of patents in general in motivating invention and disclosure, argue that biomedical research was one of several key areas where competing patent rights could actually prevent useful and affordable products from reaching the marketplace. Proponents of the theory claimed that too many property rights could lead to less innovation.

Classic example

In Heller's 1998 Harvard Law Review article,^[1] he noted that after the fall of Communism, in many Eastern European cities there were a lot of open air kiosks, but also a lot of empty stores. Upon investigation, he concluded that because many different agencies and private parties had rights over the use of store space, it was difficult or even impossible for a startup retailer to negotiate successfully the use of that space. Even though all the persons with ownership rights were losing money with the empty stores, and stores were in great demand, their competing interests got in the way of the effective use of space.

Copyrights

In the same way, competing use of copyrights can prevent a product from coming to the marketplace at a reasonable price, resulting in lost royalty income for the copyright holders. For example, WKRP in Cincinnati was one of the most popular syndicated sitcoms of all time, and many television shows from that era have been successfully released on DVD. However, for many years, WKRP was not available on DVD. When it was a television program, an agreement was in place between television producers and music licensing organizations such as ASCAP and BMI wherein a standard licensing fee was paid for each song that was played on a television show. As such, the producers could determine how much money would be paid for their use of music clips and budget accordingly. However, there is no similar standard agreement for use of music on DVDs (which ASCAP and BMI do not control), and producers of programs from that era (and into the present) are now faced with the prospect of negotiating individually with several dozen composers. The current owner of the show, 20th Century Fox, released the show on DVD starting in the first half of 2007, using "soundalike" versions of music for which they could not obtain rights.^{[citation needed]}

Eminent domain

The owners of this Chongqing "nail house" refused to leave it, thwarting plans for a shopping mall. Chinese law doesn't include eminent domain.

To construct roads, railroads, and similar transportation arteries, eminent domain has long been considered necessary. Although the benefit to society from the transportation route may be substantial, without eminent domain, every single property owner along the way must agree for the route to be built. This provides conditions for the tragedy of the anticommons, as even if hundreds agree, a single landowner can stop the road or railroad. The ability for one person to veto the construction drastically increases the transaction costs for such projects.

See also

• Tragedy of the commons
• Market failure
• Georgism
• Network effects
• Rivalry (economics)

Tragedy of the anticommons is related to other concepts:

	Property rights	Common ownership or lack of property rights
Bad outcome/tragedy	Tragedy of the anticommons	Tragedy of the commons
Good outcome/cornucopia	normal case	Inverse commons

References

1. ^ ^{a b c} Heller, Michael (January 1998). "The Tragedy of the Anticommons". Harvard Law Review. http://ideas.repec.org/p/wdi/papers/1997-40.html. 
2. ^ Heller, Michael (2008). The Gridlock Economy: How Too Much Ownership Wrecks Markets, Stops Innovation, and Costs Lives. Basic Books. ISBN 978-0465029167. http://www.gridlockeconomy.com/. 
3. ^ Heller, M. A.; Eisenberg, R. (May 1998). Can Patents Deter Innovation? "Can Patents Deter Innovation? The Anticommons in Biomedical Research". Science 280 (5364): 698–701. doi:10.1126/science.280.5364.698. PMID 9563938. http://www.sciencemag.org/cgi/content/full/280/5364/698 Can Patents Deter Innovation?. 

• Rose, Carol M. (1986) The Comedy of the Commons: Commerce, Custom and Inherently Public Property, 53 Univ. of Chi. L. Rev. 711 , reprinted as chapter 5 in: Rose, Carol M., Property and persuasion: Essays on the history, theory and rhetoric of ownership, Westview Press 1994
• Hickman, J.; Dolman, E. (2002). "Resurrecting the Space Age: A State-Centered Commentary on the Outer Space Regime". Comparative Strategy 21 (1): 2002. doi:10.1080/014959302317350855. 
• Depoorter, B.; Parisi, F.; Schulz, N. (2003). "Fragmentation in Property: Towards a General Model" (PDF). Journal of Institutional and Theoretic Economics 159: 594–613. http://www.law.gmu.edu/assets/files/publications/working_papers/02-03.pdf. 
• Buchanan, James; Yoon, Yong (2000). "Symmetric Tragedies: Commons and Anticommons" (PDF). Journal of Law and Economics 43 (1): 1–13. doi:10.1086/467445. JSTOR 725744. http://www.econ.ucsb.edu/~tedb/Courses/Ec100C/Readings/BuchananYoon.pdf. 

External links

• Heller's talk in the Authors@Google series