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The Coase theorem: coherent, logical, and not disproved

  • DOUGLAS W. ALLEN (a1)
Abstract
Abstract:

There exists a long line of challengers to the ‘Coase Theorem’. All of these rest on fundamental misconceptions of property rights, transaction costs, and their interaction. Here I examine two attacks that have gone unchallenged: one by Halpin, the other by Usher. I argue that both, in failing to either use or understand an adequate definition of transaction costs, fail to deliver a fatal blow to Coase's famous idea.

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Corresponding author
*Email: allen@sfu.ca
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This list contains references from the content that can be linked to their source. For a full set of references and notes please see the PDF or HTML where available.

R. H. Coase (1937), ‘The Nature of the Firm’, Economica, 4: 386405.

R. H. Coase (1959), ‘The Federal Communications Commission’, Journal of Law and Economics, 2 (1): 140.

R. H. Coase (1960), ‘The Problem of Social Cost’, Journal of Law and Economics, 3: 144.

R. Cooter (1982), ‘The Cost of Coase’, Journal of Legal Studies, 11: 133.

D. Cymrot , J. Dunlevy , and W. Even (2001), ‘‘Who's on First’: An Empirical Test of the Coase Theorem in Baseball’, Applied Economics, 33: 593603.

C. J. Dahlman (1979), ‘The Problem of Externality’, Journal of Law and Economics, 22 (1): 141162.

H. Demsetz (1968), ‘The Cost of Transacting’, Quarterly Journal of Economics, 82: 3353.

H. Demsetz (1969), ‘Information and Efficiency: Another Viewpoint’, Journal of Law and Economics, 12 (1): 122.

A. Halpin (2007), ‘Disproving the Coase Theorem?’, Economics and Philosophy, 23 (3): 321341.

J. R. Hicks (1935), ‘A Suggestion for Simplifying the Theory of Money’, Economica, 2: 119.

G. A. Mumey (1971), ‘The ‘Coase Theorem’: A Reexamination’, Quarterly Journal of Economics 85 (4): 718723.

G. J. Stigler (1977), ‘The Conference Handbook’, Journal of Political Economy, 85 (2): 441443.

D. Usher (1998), ‘The Coase Theorem is Tautological, Incoherent or Wrong’, Economics Letters, 61: 311.

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Journal of Institutional Economics
  • ISSN: 1744-1374
  • EISSN: 1744-1382
  • URL: /core/journals/journal-of-institutional-economics
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