Tragedy of the anticommons

Scientists are often reluctant to share their data

The tragedy of the anticommons is a type of coordination breakdown, in which a single resource has numerous rightsholders who prevent others from using it, frustrating what would be a socially desirable outcome. It is a mirror-image of the older concept of tragedy of the commons, in which numerous rightsholders' combined use exceeds the capacity of a resource and depletes or destroys it.^[1] The "tragedy of the anticommons" covers a range of coordination failures including patent thickets, submarine patents, and nail houses. Overcoming these breakdowns can be difficult, but there are assorted means, including eminent domain, laches, patent pools, or other licensing organizations.

The term originally appeared in Michael Heller's 1998 article of the same name^[1] and is the thesis of his 2008 book.^[2] In a 1998 article^[3] in Science, Heller and Rebecca Eisenberg, while not disputing the 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 for 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.

Eminent domain and transportation

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.

Similarly, Michael Heller indicates that the rise of the "robber barons" in medieval Germany was the result of the tragedy of the anticommons.^[4] Nobles commonly attempted to collect tolls on stretches of the Rhine passing by or through their fiefs, building towers alongside the river and stretching iron chains to prevent boats from carrying cargo up and down the river without paying a fee.^[4] Repeated attempts by the Holy Roman Empire, including several efforts over the centuries led by the Emperor himself, to regulate toll collection on the Rhine, but it was not until the establishment of the "Rhine League" of the Emperor, certain nobles, and certain clergy that the control of the "robber barons" over the Rhine was crushed by military force. River tolls on the Rhine, increasingly imposed by states rather than individual lords, remained a sticking point in relations and commerce in the Rhine basin until the establishment of the Central Commission for Navigation on the Rhine in 1815.

See also

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

References