Transaction Costs and the Robustness of the Coase Theorem

  title={Transaction Costs and the Robustness of the Coase Theorem},
  author={L. Anderlini and L. Felli},
  journal={Wiley-Blackwell: Economic Journal},
  • L. Anderlini, L. Felli
  • Published 2000
  • 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… CONTINUE READING
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