Transaction Costs and the Robustness of the Coase Theorem

Luca Anderlini and Leonardo Felli

Economic Journal, 2006, vol. 116, issue 508, 223-245

Abstract: This paper explores the extent to which "ex ante" transaction costs may lead to failures of the Coase Theorem. In particular we identify the basic 'hold-up problem' that arises whenever the parties to a Coasian negotiation have to pay "ex ante costs" for the negotiation to take place. We then show that a 'Coasian solution' to this problem is not available: a Coasian solution 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 a new hold-up problem. Copyright 2006 Royal Economic Society.

Date: 2006
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Related works:
Working Paper: Transaction Costs and the Robustness of the Coase Theorem (2003)
Working Paper: Transaction Costs and the Robustness of the Coase Theorem (2003)
Working Paper: Transaction Costs and the Robustness of the Coase Theorem (2001)
Working Paper: Transaction costs and the robustness of the Coase Theorem (2000)
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