• DOI:10.1111/j.1468-0297.2006.01054.x
• Corpus ID: 3059129

Transaction Costs and the Robustness of the Coase Theorem

@article{Anderlini2000TransactionCA,
  title={Transaction Costs and the Robustness of the Coase Theorem},
  author={Luca Anderlini and Leonardo Felli},
  journal={Wiley-Blackwell: Economic Journal},
  year={2000}
}

• L. Anderlini, L. Felli
• Published 1 February 2001
• Economics
• Wiley-Blackwell: Economic Journal

This paper explores the extent to which the presence of ex-ante transaction costs may lead to failures of the Coase Theorem. In particular we identify and investigate the basic 'hold-up problem' which arises whenever the parties to a Coasian negotiation have to pay some ex-ante costs for the negotiation to take place. We then show that a 'Coasian solution' to this hold-up problem is not available. This is because a Coasian solution to the hold-up problem typically entails a negotation about the payment of the costs associated with the future negotiation which in turn is associated with a fresh set of ex-ante costs, and hence with a new hold-up problem.