Hostname: page-component-7c8c6479df-fqc5m Total loading time: 0 Render date: 2024-03-28T09:01:14.168Z Has data issue: false hasContentIssue false

Taking the Coase Theorem Seriously

Published online by Cambridge University Press:  05 December 2008

Richard D. McKelvey
Affiliation:
California Institute of Technology
Talbot Page
Affiliation:
Brown University

Extract

It is sometimes believed that technical apects of a theorem have little to do with the policy implications of the theorem. On the contrary, in this paper we argue that for the Coase Theorem, the technical details are very important in understanding the potential policy implications, since the two interact in a way that leads to a dilemma: a formally correct version of the theorem that yields the usual conclusions requires assumptions that are too restrictive to give the theorem much policy relevance. On the other hand, relaxing the assumptions of the theorem to be sufficiently plausible to be applicable in real world settings modifies the conclusions of the theorem.

Type
Symposium
Copyright
Copyright © Cambridge University Press 1999

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

[1]Aivazian, V. A. and Callen, J. L.. 1981. ‘The Coase Theorem and the Empty Core’. Journal of Law and Economics, 24:175CrossRefGoogle Scholar
[2]Coase, Ronald. 1960. ‘The problem of social cost’. Journal of Law and Economics, 3:131CrossRefGoogle Scholar
[3]Coase, Ronald. 1988. The Firm, the Market and the Law. University of Chicago PressGoogle Scholar
[4]Coase, Ronald. 1959. ‘The Federal Communications Commission’. The Journal of Law and Economics, 10: 25Google Scholar
[5]Eggertsson, Thrainn. 1990. Economic Behavior and Institutions. Cambridge University PressCrossRefGoogle Scholar
[6]Farrell, Joseph. 1987. ‘Information and the Coase Theorem’. Economic Perspectives, 1:113–29CrossRefGoogle Scholar
[7]Fudenberg, D. and Tirole, J.. 1991. Game Theory. MIT PressGoogle Scholar
[8]Hurwicz, Leonid. 1995. ‘What is the Coase Theorem’. Japan and the World Economy, 7:4974CrossRefGoogle Scholar
[9]Illing, G. 1992. ‘Private information as transaction costs: the Coase Theorem revisited’. Journal of Institutional and Theoretical Economics, 148:558–76Google Scholar
[10]McKelvey, R. and Page, T.. 1997. ‘An experimental study of the Coase Theorem with incomplete information’. Caltech Working PaperGoogle Scholar
[11]McKelvey, R. and Page, T.. 1997. ‘Status Quo Bias in bargaining: an extension of the Myerson-Satterthwaite Theorem with an application to the Coase Theorem’. Caltech Working PaperGoogle Scholar
[12]Myerson, R. B. and Satterthwaite, M. A.. 1983. ‘Efficient mechanisms for bilateral trading’. Journal of Economic Theory, 29:265–81CrossRefGoogle Scholar
[13]Rob, R. 1989. ‘Pollution claims settlements with private information’. Journal of Economic Theory, 35:307–33CrossRefGoogle Scholar
[14]Samuelson, William. 1984. ‘A comment on the Coase Theorem’. In Game-Theoretic Models of Bargaining. Roth, A. (ed.). Cambridge University PressGoogle Scholar
[15]Stigler, George. 1966. The Theory of Price, p. 113.3rd edn.MacMillanGoogle Scholar
[16]Varian, Hal. 1987. Intermediate Microeconomics. W. W. Norton & CompanyGoogle Scholar