The Coase theorem depends on a number of assumptions, among others, perfect information about each other's payoff function, maximising behaviour and zero transaction costs. An important question is whether the Coase theorem holds for real market transactions when these assumptions are violated. This is the question examined in this paper. We consider the results of Danish waterworks' attempts t...

INTRODUCTION................................................................................... 397 I. WHY IS THERE A TENSION BETWEEN PRIVACY AND SECURITY? ................................................................................... 398 II. WHAT IS PRIVATE? ..................................................................... 399 III. WHAT IS SECURE?.........................................

structure of the problem at hand. In 1991, Ronald H. Coase received the Nobel prize for his work on the role of transaction costs in economics. His paper on “The Nature of the Firm” (Coase 1937) introduced transaction costs as the primary reason for the existence of firms. Coase pointed out that firms substitute an internal management structure for market transactions to eliminate the costs of ...

For over a quarter of a century, one small corner of the voluminous literature on the Coase theorem has been the scene of an animated and, at times, heated debate between Walter Block and Harold Demsetz. Over the entire course of the debate, Block (1977, 1995, 2000) has argued that when individuals have only psychic income with which to maintain their property rights, the Coase theorem fails. A...

This essay presents a theory of the State as derived from the writings of Coase, Stigler, and Smith. It argues that the state may find a role in (1) lowering the level of transactions costs; and (2) redistributing property rights given the level of non-zero transactions costs. These tenets suggest an explanation for the secular growth of government. Also, alternative to the Marshallian theory o...

This paper investigates, in an experimental setting, the eeect of private information on the Coase theorem's predictions of eeciency and allocative neutrality. For a two-person bargaining game, we nd signiicantly more inef-ciency and allocative asymmetry in the case of private information compared with the case of complete information. We also nd substantial bargaining breakdown, which is not p...

We reconsider the well known Becker Coase (BC ) theorem according to which changes in divorce law should not affect divorce rates. We do that in a context of households that consume public goods in addition to private goods. For the Becker-Coase theorem to hold in this setting, utility must be transferable both within marriage and upon divorce, and the marginal rate of substitution between publ...