Information Asymmetries and the Rights to Exclude
The American law generally regards the “bundle of rights” as property’s dominant metaphor. On this conception of property, ownership empowers an individual to control a particular resource in any number of ways. For example, he may use it, transfer it, exclude others from it, divide it, and perhaps even destroy it. The various rights in the bundle, however, are not equal in terms of importance. To the contrary, American courts and commentators have deemed the “right to exclude” foremost among the property rights, with the Supreme Court characterizing it as the “hallmark of a protected property interest” and leading property scholars describing the right as the core, or the essential element, of ownership. Yet for all its centrality, in the minds of courts and legal scholars, there is substantial conceptual confusion about the nature of the “right to exclude.” This confusion manifests itself in the form of inconsistent judicial opinions and unsatisfying commentary on those opinions. Discussions of a unitary “right to exclude” in property law obscure more than they reveal, in part because scholars of exclusion have focused entirely on pure in rem exclusion rights protected by trespass law without exploring the interactions of those exclusion rights that are not protected by trespass law. In my view, it is more helpful to think about exclusion more broadly, so as to encompass those rights that are not themselves founded on trespass law, but that can nevertheless substitute for trespass-based exclusion rights. Exclusion, in these terms, includes a property owner’s efforts to exclude prospective entrants from his resource, as well as the entrants’ decisions to exclude themselves from the owner’s resource.