Transaction Costs and the Robustness of the Coase Theorem

Luca Anderlini & Leonardo Felli ()
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Luca Anderlini & Leonardo Felli: Department of Economics, Georgetown University, http://www.georgetown.edu/faculty/la2/
Authors registered in the RePEc Author Service: Luca Anderlini and Leonardo Felli ()

Working Papers from Georgetown University, Department of Economics

Abstract: This paper explores the extent to which the presence of ex-ante transaction costs may lead to failures of the Coase Theorem. In particular we identify and investigate the basic `hold-up problem' which arises whenever the parties to a Coasian negotiation have to pay some ex-ante costs for the negotiation to take place. We then show that a `Coasian solution' to this hold-up problem is not available. This is because a Coasian solution to the hold-up problem typically entails a negotiation about the payment of the costs associated with the future negotiation which in turn is associated with a fresh set of ex-ante costs, and hence with a new hold-up problem

Keywords: Transaction Costs; Hold-Up Problem; Coase Theorem; Coasian Negotiation. (search for similar items in EconPapers)
JEL-codes: C70 D23 D60 D80 (search for similar items in EconPapers)

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Related works:
Working Paper: Transaction Costs and the Robustness of the Coase Theorem (2001)
Working Paper: Transaction Costs and the Robustness of the Coase Theorem
Journal Article: Transaction Costs and the Robustness of the Coase Theorem (2006)
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