1. Private Property Rights
the right to use the property exclusively
the exclusive right to enjoy income from the property
the right to sell the property outright

2. Transaction Costs
Transaction costs comprise all those costs that cannot be conceived to exist in a Robinson Crusoe (one-man) economy.
Transaction costs are all those costs that are not directly incurred in production.

3. Transaction Costs 1. Information cost or searching cost
2. Defining cost or delineating cost
3. Measurement cost and pricing cost
4. Negotiating and contracting or exchange costs
5. Policing and enforcing cost

4. Ways to Reduce Transaction Costs
lthe use of money as a medium of exchange
lthe existence of a market place
lthe existence of middlemen
lan effective government upholding private property rights
lsocial custom

5. Common Property Rights
There is no delimitation or delineation of its use rights to any private party.
No one has the right to exclude others from using it and all are free to compete for its use.
There are no exclusive use rights, no rights to be transferred and no net income can be derived from using the common property.

6. Private Cost
Private cost measures the value of the highest-valued alternative uses of the resources available to the producer, or the person who takes the action.

7. Social Cost
Social cost measures the value of the highest-valued alternative uses of the resources available to the whole society.