The Coase Theorem and alternative business models of festivals: From failure to success as Super-Ronald saves the world again?

Julia Hiscock and David Hojman

No 201915, Working Papers from University of Liverpool, Department of Economics

Abstract: We use the Coase Theorem to compare two business models of Sidmouth Festival, the first model failing in 2004 and the second succeeding in 2019. The 2004 approach was in many ways 'monolithic', whereas the 2019 one was in some key respects 'decentralised'. The most important factor in defining failure or success was whether the Coase Theorem assumptions applied or not. The explanation for these different outcomes is related to negative and positive externalities, entitlements and liabilities, transaction costs, transparency and private information, free riding, business sponsorship, and cultural and ideological change. Institutions became more efficient, which is compatible with high transaction costs encouraging Coase bargaining (Robson 2014), or with a 'super Coase Theorem' (Dixit & Olson 2000) applying no matter how high transaction costs may be. Our insights are widely applicable to other festivals and similar experiences.

Keywords: Externalities; Property rights; Transaction costs; Pareto-improving bargains; Institutions; Folk; Sidmouth (search for similar items in EconPapers)
Pages: 40 pages
Date: 2019-10
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https://www.liverpool.ac.uk/media/livacuk/schoolof ... ,the,world,again.pdf First version, 2019 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:liv:livedp:201915

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