The Coase Theorem and the empty core: Inspecting the entrails after four decades

Varouj Aivazian and Jeffrey L. Callen

International Review of Law and Economics, 2023, vol. 73, issue C

Abstract: Ronald Coase pioneered the transaction cost approach to the modern analysis of institutions, contracts, and property rights. We argue that core theory enhances Coase’s transaction cost approach by injecting considerations of coalition formation and stability into the analysis. Analysis of coalitional stability also provides additional insights regarding the nature of transaction costs and the efficiency of institutional arrangements when there are such costs. Overcoming the empty core is potentially an important function of contracts, institutions, and property rights. Empty cores complement transaction costs in rationalizing real-world institutional arrangements.

Keywords: Coase Theorem; Empty core; Property rights; Institutional arrangements; Farsighted core (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0144818822000734
Full text for ScienceDirect subscribers only

Related works:
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:eee:irlaec:v:73:y:2023:i:c:s0144818822000734

DOI: 10.1016/j.irle.2022.106117

Access Statistics for this article

International Review of Law and Economics is currently edited by C. Ott, A. W. Katz and H-B. Schäfer

More articles in International Review of Law and Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().