property rights for market failure

Question 1

how property rights solve market failure

Answer 1

-incentive to not exploit common access resources
-negative externality internalised (won’t want to ruin their own land)
-if enforced, reduce quantity to socially optimum level

Question 2

issues with property rights and market failure

Answer 2

-can they be efficiently distributed
-cost of enforcement
-equity- who gets the rights (some people can’t drink from water e.g.)