Ronald Coase pioneered the transaction cost approach to the modern analysis of institutions, contracts, and property rights. We argue that core theory enhances Coase’s transaction cost approach by injecting considerations of coalition formation and stability into the analysis. Analysis of...

We examine experimentally the bargaining process and the final allocation of payoffs in games that differ in terms of whether or not the core exists and in the initial allocation of property rights among the players. The paper highlights the interaction between property rights, transaction costs...

This paper clarifies some of the issues raised by the original Aivazian-Callen-Coase debate concerning the Coase Theorem and the empty core. Despite the misconception by some legal scholars that Coase's limiting argument resolves the empty core issue, it is shown why economic scholars tend to...

This paper clarifies and synthesizes elements of the two decade old debate concerning the Coase theorem and the empty core. Five lessons can be derived from this debate. First, the Coase theorem may break down when there are more than two participants (provided the additional participants bring...

Ronald Coase pioneered the transaction cost approach to the modern analysis of institutions, contracts, and property rights. We argue that core theory enhances Coase’s transaction cost approach by injecting considerations of coalition formation and stability into the analysis. Analysis of...