Property rights economics

The decade of the 1960s was extraordinarily fertile in applied as well as formal microeconomics. Thus the decade witnessed fundamental breakthroughs in the economics of uncertainty and information, human capital theory, the first stabs at what would later be called ‘agency theory ’ and ‘mechanism design’, and other advances in mathematical economics. One of the important breakthrough theories of the 1960s was property rights economics (PRE). ‘First-generation ’ property rights economists such as Armen Alchian, Ronald Coase, Harold Demsetz, and (Coase student) Steven Cheung developed a refined but mainly verbal approach to an economic explanation that they saw, and advertised, as fundamentally neoclassical but with a much wider explanatory reach. Their work served as direct inspiration for the slightly later work of the ‘second-generation ’ PRE theorists such as Louis De Alessi