Transaction Costs and the Robustness of the Coase Theorem
This paper explores the extent to which "ex ante" transaction costs may lead to failures of the Coase Theorem. In particular we identify the basic 'hold-up problem' that arises whenever the parties to a Coasian negotiation have to pay "ex ante costs" for the negotiation to take place. We then show that a 'Coasian solution' to this problem is not available: a Coasian solution typically entails a negotiation 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 a new hold-up problem. Copyright 2006 Royal Economic Society.
Year of publication: |
2006
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Authors: | Anderlini, Luca ; Felli, Leonardo |
Published in: |
Economic Journal. - Royal Economic Society - RES, ISSN 1468-0297. - Vol. 116.2006, 508, p. 223-245
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Publisher: |
Royal Economic Society - RES |
Saved in:
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