How to negotiate with Coase?

Jean-Christophe Pereau and Sébastien Rouillon

Cahiers du GREThA (2007-2019) from Groupe de Recherche en Economie Théorique et Appliquée (GREThA)

Abstract: This article analyses the bargaining side of the Coase theorem in a 3-player strategic framework. We consider several bilateral bargaining protocols between two firms polluting one household (the victim). Our results show that when property rights are given to the victim, he prefers to bargain separetely and simultaneously with the two firms. However when property rights are given to the firms, they prefer to bargain sequentially with the household. This last configuration yields a non optimal outcome and invalidates the bargaining Coase theorem.

Keywords: Coase theorem; delegation; non cooperative bargaining; property rights; sequential negotiation; simultaneous negotiation (search for similar items in EconPapers)
JEL-codes: C78 K41 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:grt:wpegrt:2011-02

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