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A Reexamination of the Coase Theorem

Jingang Zhao, University of Saskatchewan, Canada
2018 Journal of Mechanism and Institution Design  
This paper makes three advances: 1) It fixes the empty-core problem of the Coase theorem; 2) it provides the smallest upper bound of transaction costs below which the optimal or efficient outcomes can be achieved; and 3) it establishes two mathematical theorems that capture the main insights and major aspects of the Coase theorem. A simpler version of the theorems says that in a coalitional production economy without transaction costs, the maximal payoff will be produced by the optimal firms
more » ... he optimal firms and be allocated in the always non-empty core.
doi:10.22574/jmid.2018.12.005 fatcat:eam6i7zqwjhnxc4x6isfcd3msy