The Information Costs of Exclusion
https://lawreview.uchicago.edu/print-archive/information-costs-exclusion
The appropriate scope of the right to exclude is among the most contentious topics in property theory. In recent years, scholars who favor exclusion have developed novel arguments to support it by focusing on the information costs of property. Because everyone must respect property rights, those rights must be simple enough for everyone to understand their content. And the right to exclude, which requires everyone to keep off property unless the owner allows them on, is simple enough to be understood easily by those who must respect it. This Article defends an alternative analysis of how the information costs of property bear on the proper scope of exclusion. Legal rules generate two kinds of information costs: the costs of learning rules and the costs of applying them. While simpler rules may be easier to learn, they need not be easier to apply. Instead, a rule is easy to apply if individuals can easily determine whether a particular action would violate it. Once the costs of applying the right to exclude are considered, I claim, the law sometimes reduces information costs not by respecting exclusion but rather by restricting it. Information costs do not uniformly support greater exclusion, then, as exclusion’s defenders have argued; rather, those costs sometimes favor restricting it.