On a Fallacy in the Coase Theorem and the Theorem of Transaction Costs Substitution
Cheung Steven N. S. ()
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Cheung Steven N. S.: University of Hong Kong, Pok Fu Lam, Hong Kong
Man and the Economy, 2020, vol. 7, issue 2, 11
This paper first presents a historical account of the origin of the Coase Theorem. It then elaborates its significance in explaining the working of economic institutions. After expounding the concepts of transaction cost and rent dissipation, it points out an error in the Coase Theorem. Lastly, the paper propounds the Theorem of Transaction Costs Substitution as an extended and general version of the Coase Theorem.
Keywords: Coase theorem; market price; rent dissipation; theorem of transaction costs substitution; transaction cost (search for similar items in EconPapers)
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