Entrepreneurship and Dynamic Property Rights: A Process Model

Embracing Ronald Coase’s (1974) recognition of the role of private enterprise in resolving problems with lighthouse services and other public goods, we suggest that the evolution of property rights is rooted in entrepreneurial action. We argue that property rights entrepreneurship is more important and pervasive than recognized and support this argument using examples ranging from evolving intellectual property protections for radio frequencies to the control of Alaskan king crab fisheries. Moreover, we argue that the standard institutional economics logic of rational analysis of costs and benefits does not adequately characterize the phenomenon. We propose that property rights entrepreneurship is best portrayed as an iterative and evolutionary interaction between entrepreneurial action and economic structures. Broadly, we add to the entrepreneurship literature by emphasizing the importance of property rights entrepreneurship and advancing a dynamic model of property rights entrepreneurship. We also introduce new constructs such as property rights voids, enabling conditions, the activation level of excludability, the presumption of rights, and distinctions between asset-rights and product-rights entrepreneurship.