Teaching the Coase Theorem: Are We Getting It Right?

Michael Butler and Robert Garnett ()
Additional contact information
Robert Garnett: Department of Economics, Texas Christian University

No 200202, Working Papers from Texas Christian University, Department of Economics

Abstract: The authors examine current textbook representations of Coase's analysis of negative externalities [Coase, 1960]. Standard treatments identify Coase's ideas with Stigler's Coase Theorem: a zero transaction cost world in which efficient solutions emerge automatically, regardless of legal rules and the initial allocation of rights. Yet Coase's seminal paper breaks from this mode of analysis. The authors use this intellectual history to distinguish two approaches to negative externalities: blackboard (Pigou, Stigler, Samuelson) and Coasean. They survey 45 microeconomics textbooks and find that 80 percent misrepresent Coase's arguments. They argue that a Coasean approach increases students' critical thinking skills by challenging them to move beyond simple laissez faire or interventionist solutions.

Keywords: Coase; teaching (search for similar items in EconPapers)
JEL-codes: A2 L1 L2 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2002-06
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Atlantic Economic Journal, June 2003, pages 133-145

Downloads: (external link)
http://www.econ.tcu.edu/RePEc/tcu/wpaper/wp02-02.pdf First version, 2002 (application/pdf)

Related works:
Journal Article: Teaching the coase theorem: Are we getting it right? (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tcu:wpaper:200202

Access Statistics for this paper

More papers in Working Papers from Texas Christian University, Department of Economics Contact information at EDIRC.
Bibliographic data for series maintained by John Harvey ().