Do societies choose inefficient policies and institutions, in contrast to what would be suggested by a reasoning extending the Coase Theorem to politics? Do societies choose inefficient policies and institutions because of differences in the beliefs and ideologies of their peoples or leaders? Or...

The use of Payment for Environmental Services (PES) is not a new type of contract but they have become more in vogue because of the potential for sequestering carbon by paying to prevent deforestation and degradation of forest lands. We provide a framework utilizing transaction costs to...

This paper examines the relation between ownership, corporate form, and innovation for a cross-section of private and publicly traded innovating firms in the US and 15 European countries. A striking novel observation emerges from our analysis: while most innovating firms in the US are publicly...

The Political Coase Theorem (PCT) states that, in the absence of transaction costs, agents should agree to implement efficient policies regardless of the distribution of bargaining power among them. This paper uses a laboratory experiment to explore how commitment problems undermine the validity...

The Coase theorem implies that, in a world of positive transaction costs, any of a number of strategies, including judicially enforced private contracts, judicially enforced laws, or even government regulation, may be the cheapest way to bring about efficient resource allocation. Unfortunately,...

This paper assumes that workers can move from a market with high unemployment to one with low unemployment at a cost. In principle. equilibrium mobility can be greater or less than the social optimum. For most plausible parameter values. however. mobility is too low. Intuitively. mobility has a...