Professors Christopher Buccafusco and Chris Sprigman describe their ingenious Coasean experiment (which at last count has garnered over 1500 comments!) to test how much people value the “right to recline” on airplane seats. Their findings? People’s valuation of reclining vs. not being reclined upon depend entirely on which party — i.e. the recliner or the reclinee — holds the initial ownership of the legal right, i.e. the right to recline or the right not to be reclined upon. Professors Buccafusco and Sprigman thus conclude:
… we still don’t have any meaningful guidance about whether a “right to recline” or a “right not to be reclined upon” is the better rule … Whatever the answer, though, we are left with the puzzle of why people seem unwilling to bargain over a resource that at least some people are willing to fight over. Ultimately, it seems like there are lots of situations when people fail to negotiate over reclining when doing so would make both parties better off.
Is this really a puzzle, though? As our good friend Terry Anderson likes to point out, bargaining won’t work when property rights are unclear, a situation we call “legal failure.” Disputes over the “right to recline” on airplanes provide a textbook example of a situation involving unclear or contested property rights. If property rights were clearly assigned to either party (the recliner or the reclinee), then we would expect to see more Coasean bargaining. But in the absence of clear or well-defined property rights (the current situation on commercial airplanes), we would expect to see more conflict. (By the way, we previously modeled this conflict as a Prisoner’s Dilemma: who will be the first to defect? What do you think?) In any case, the lesson here is clear. If we wish to reduce conflict (and promote Coasean bargaining), all the airlines need to do is to clearly assign the right to recline or the right not to be reclined upon to one party or the other.