A Reexamination of the Coase Theorem
Jingang Zhao ()
The Journal of Mechanism and Institution Design, 2018, vol. 3, issue 1, 111-132
This paper makes three advances: 1) It fixes the empty-core problem of the Coase theorem; 2) it provides the smallest upper bound of transaction costs below which the optimal or efficient outcomes can be achieved; and 3) it establishes two mathematical theorems that capture the main insights and major aspects of the Coase theorem. A simpler version of the theorems says that in a coalitional production economy without transaction costs, the maximal payoff will be produced by the optimal firms and be allocated in the always non-empty core.
Keywords: Coalition formation; core; optimal firms. (search for similar items in EconPapers)
JEL-codes: C71 D23 L11 L23 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:jmi:articl:jmi-v3i1a5
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