Abstract: This paper addresses questions relating to government’s decision to allocate property rights in a resource to societal actors based upon, and in proportion to, those actors’ prior behavior with respect to the resource at issue. First, assuming that government wishes to distribute property rights based upon a “grandfathering” system, but also wishes to avoid actors inefficiently engaging in a behavior to secure (additional) property rights, the government should allocate the property rights based upon a time period that precedes the announcement of the intent to allocate such grandfathered rights. Second, once societal actors begin to anticipate, and therefore to act in anticipation of, such grandfathering regimes, the government should resort to basing property allocations on constrained randomly varying criteria. A third issue is why should we expect government (i) to wish to employ a grandfathering regime, yet also (ii) to wish to cabin the ability of societal actors to “take full advantage” of grandfathering opportunities? Relying on considerations of public choice, the paper advances both a pessimistic and an optimistic account of this phenomenon.

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