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Taking the Coase Theorem Seriously

Published online by Cambridge University Press:  05 December 2008

Richard D. McKelvey  and
Talbot Page
Richard D. McKelvey
Affiliation:
California Institute of Technology
Talbot Page
Affiliation:
Brown University
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Extract

It is sometimes believed that technical apects of a theorem have little to do with the policy implications of the theorem. On the contrary, in this paper we argue that for the Coase Theorem, the technical details are very important in understanding the potential policy implications, since the two interact in a way that leads to a dilemma: a formally correct version of the theorem that yields the usual conclusions requires assumptions that are too restrictive to give the theorem much policy relevance. On the other hand, relaxing the assumptions of the theorem to be sufficiently plausible to be applicable in real world settings modifies the conclusions of the theorem.

Type
Symposium
Information
Economics & Philosophy , Volume 15 , Issue 2 , October 1999 , pp. 235 - 247
Copyright
Copyright © Cambridge University Press 1999

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