Journal of Institutional Economics (2017), 13: 4, 793–800 C  Millennium Economics Ltd 2017 doi:10.1017/S1744137417000194 First published online 10 May 2017 Comment Property institutions and the limits of Coase DEAN LUECK ∗§ Department of Economics and Ostrom Workshop, Indiana University, IN, USA Abstract. Coase’s (1960) contractual single-exchange framework is challenged by Arru ˜ nada (2017) as a framework that cannot be used to understand the complex nature of property law and related institutions. Arru ˜ nada proposes the sequential exchange model as an alternative framework. Differences between the two approaches are considered and some applications in land and natural resources are used to evaluate his critique. These cases support Arru ˜ nada’s critique of the simple contracting approach to property, showing that for many natural resources private contracting has not been the solution and that a mix of property institutions govern. Contrary to Arru ˜ nada, however, I argue that the limits of the single-exchange framework arise not because of sequential exchange, but because assets (parcels of land) are complex and physically connected. 1. Introduction Ronald Coase’s work on social cost (1960) has been the foundation for the economic analysis of property rights 1 and of law. This ‘Coasian’ approach became embedded in economics and thus makes the critique offered by Arru ˜ nada (2017) both important and challenging. This short paper will examine the critique of what Arru ˜ nada (p. 1) calls the ‘contractual single-exchange framework’ used by Coase and then generations of economists. I argue that his critique is mostly well taken but that further consideration of the complex nature of property (land and related assets) is a further source of the limitations of the Coasian framework. I also consider some applications that lend support to his framework and his critique. 2. The sequential exchange critique of the classic Coasian approach Arru ˜ nada argues that the law and economics of property (or the economics of property law) is limited by its strong linkage to the single-exchange model ∗ Email: lueck@indiana.edu § Benito Arru ˜ nada provided helpful comments. 1 Gordon (1954) on open access waste, and Demsetz (1967) on property rights regimes as economic choices, were other early important contributors to property rights. 793 https://doi.org/10.1017/S1744137417000194 Published online by Cambridge University Press