The explicit treatment of heterogeneity among the users of the commons
leads to results that differ from those that are now generally accept
ed in the literature. The owner of the fixed factor is not able to exp
ropriate the rents of privatization. Rather, the resulting distributio
n of income to the free factor after privatization depends on the tech
nology and the institutional arrangements. This result extends to more
than two goods if the decline in the price of the good produced in th
e commons is sufficient to offset the decline in the marginal product
of labor in the rest of the economy.