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.
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References
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CheungStevenN. S., The Myth of Social Cost, San Francisco: CATO Institute, 1980.
2.
CoaseRonaldH., “The Nature of the Firm, Economica, new series 4 (November 1937), pages 386–405. Reprinted as Chapter Two in The Firm, The Market, and the Law, Chicago: The University of Chicago Press, 1988, pages 33–55.
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→ CoaseRonaldH., “The Problem of Social Cost,” Journal of Law and Economics, October, 1960, pages 1–44. Reprinted as Chapter Five in The Firm, The Market, and the Law, Chicago: The University of Chicago Press, 1988, pages 95–156.
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→ CoaseRonaldH., “The Firm, The Market, and the Law,”Chicago: The University of Chicago Press, 1988.
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→ CoaseRonaldH., “The Firm, the Market, and the Law,” Chapter One in The Firm, The Market, and the Law, Chicago: The University of Chicago Press, 1988, pages 1–31.
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→ CoaseRonaldH., “Notes on the Problem of Social Cost,” Chapter Six in The Firm, The Market, and the Law, Chicago: The University of Chicago Press, 1988, pages 157–185.
