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By Iris A. Hauswirth
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Extra info for Effective and Efficient Organisations?
Despite perfect property rights they consistently 'overfished'. The author explained this outcome with 'misperceptions of feedback'. Godoy et al. (2000) relate the efforts of Honduran Indians to increase farming productivity, not only to security of land tenure, but also to education. One could argue that these 'knowledge factors' are encapsulated in the 'bounded rationality' assumptions of organisational economics. But property rights approaches do not make them part of the analysis. 4 A summary of property rights theory's insights into the causeeffect relationships between 'organisation' and 'efficiency and effectiveness' The basic argument of property rights theory, backed by empirical evidence, supports the assumption that 'organisation matters'.
Leisure on the job), without the principal noticing it. In fact, the principal cannot even be certain whether the chosen agent is capable of doing the task. To prevent these problems, the principal has to use mechanisms that reduce the 'information asymmetry' between him and the agent. e. the choice of an exchange partner, who misrepresents his qualities to receive more favourable exchange terms. e. e. the agent putting in less effort than implicitly promised in the contract. For agency theorists the overall challenge of organising the efficient and effective completion of a task thus consists of designing an optimal incentive system, considering the risk attitude of the agents, and considering the information acquisition possibilities, and costs for the principal.
The same dynamic applies to voluntary self-restraint in the use of the resource. The damage done by one individual, overusing or depleting the comHardin (1968) produced a classic piece of work in the field. De Alessi (1980:6ff) and Milgrom and Roberts (1994:288ff)review various studies. Demsetz (1967) discusses anthropological research on land use patterns; Besley (1995) presents research on farming in Ghana. g. 3 Property rights theory 33 monly-owned asset has to be borne by all owners, not only by the person receiving the immediate benefits.