Coase Theorems 1-2-3

Joseph Felder

The American Economist, 2001, vol. 45, issue 1, 54-61

Abstract: Develops a pedagogical model so simple and powerful that students practically discover the three Coase Theorems for themselves. Three Theorems? Yes. Theorem One: In the absence of transaction costs, the initial allocation of rights between parties does not matter. Theorem Two: In the presence of transaction costs, the initial allocation of rights may matter; one initial allocation may be superior to another. The orem Three: In the presence of transaction costs, some distributions of limited rights may be superior to any that the parties could arrive at themselves through trade.

Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:sae:amerec:v:45:y:2001:i:1:p:54-61

DOI: 10.1177/056943450104500105

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