Restricted Coasean bargaining
Ian MacKenzie () and
Markus Ohndorf ()
Journal of Public Economics, 2013, vol. 97, issue C, 296-307
We investigate the efficiency of Coasean bargaining when restrictions are placed on the set of feasible bargaining outcomes. When property rights are costly to (defend) appropriate, we find that bargaining restrictions may be Pareto superior to unconstrained voluntary exchange. Under cost uncertainty over the harmful activity, we show that an efficient configuration of restrictions must balance the potential reduction in appropriation costs with the possibility of allocatively inefficient bargaining restrictions. For an all-pay auction, we find conditions where precluding bargaining is always ex ante preferable to unrestricted bargaining. For cases where the restrictions are contested, we show conditions for the continuing existence of welfare improvements.
Keywords: Coase theorem; Bargaining restrictions; Contest; All-pay auction (search for similar items in EconPapers)
JEL-codes: D62 D72 K0 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Restricted Coasean Bargaining (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:97:y:2013:i:c:p:296-307
Access Statistics for this article
Journal of Public Economics is currently edited by R. Boadway and J. Poterba
More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Nithya Sathishkumar ().