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Symposium on the Coase Theorem: Legal Fiction: The Place of the Coase Theorem in Law and Economics

Published online by Cambridge University Press:  05 December 2008

Steven G. Medema
Steven G. Medema
Affiliation:
University of Colorado at Denver
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Extract

Modern law and economics received much of its impetus from Ronald Coase's analysis in ‘The Problem of Social Cost,’ and a goodly amount of that comes from the Coase theorem, which states that, absent transaction costs, externalities will be efficiently resolved through bargaining. The fact that the analysis that came to be codified in the Coase theorem was (intentionally) an exercise in pure fiction on Coase's part did not deter the erection of a substantial edifice of positive and normative analysis on this foundation, nor, for that matter, has subsequent elaboration of Coase's intent done anything to abate the interest in the theorem and its implications.

Type
Symposium
Information
Economics & Philosophy , Volume 15 , Issue 2 , October 1999 , pp. 209 - 233
Copyright
Copyright © Cambridge University Press 1999

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