The Problem of Social Cost.¶
Coase, R. H. (1960). The Problem of Social Cost. Journal of Law and Economics, 3, 1-44.
Cited by¶
10 citations across 10 artifacts.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Externality
- with the proposal of Pigouvian taxes, was sharpened by Ronald Coase (1960)
This sourceShows that absent transaction costs efficient allocation is independent of the property-rights assignment, and that transaction costs make rights assignment decisive; emphasizes the reciprocal nature of externalities. SUPPORTS the Coase/transaction-costs claim (147) and the mutual-causation point.
- with the proposal of Pigouvian taxes, was sharpened by Ronald Coase (1960)
- Frictionless Benchmark Reasoning
- Law and economics: the Coase theorem — bargaining over property rights yields efficient allocations under zero transaction costs; the rule-design programme catalogues transaction-cost sources (search, bargaining, enforcement, measurement) and their institutional remedies.
This sourceShows that with zero transaction costs, bargaining over rights yields efficient allocations — the benchmark whose deviation catalogue is transaction-cost sources and institutional remedies.
- Law and economics: the Coase theorem — bargaining over property rights yields efficient allocations under zero transaction costs; the rule-design programme catalogues transaction-cost sources (search, bargaining, enforcement, measurement) and their institutional remedies.
- Idealized-Substrate Fallacy
- In economics, perfect-competition, zero-transaction-cost, perfect-information, and rational-actor assumptions make models illuminating about the limit and brittle in the world; Coase's theorem assumes zero transaction costs, Modigliani–Miller assumes no taxes or bankruptcy costs.
This sourceProves that with zero transaction costs the initial allocation of a property right does not affect the efficient outcome, and explicitly treats the zero-cost case as a benchmark for studying the frictions that dominate in the real world.
- In economics, perfect-competition, zero-transaction-cost, perfect-information, and rational-actor assumptions make models illuminating about the limit and brittle in the world; Coase's theorem assumes zero transaction costs, Modigliani–Miller assumes no taxes or bankruptcy costs.
- Pareto Efficiency
- … descriptive of market outcomes — markets achieve Pareto efficiency only under strong assumptions; when these fail (externalities, public goods, information asymmetries, market power), market allocations can be Pareto-inefficient (see externality and tragedy_of_the_commons as cross-DP reference candidates).
This sourceFoundational formulation of Coase Theorem: absent transaction costs, efficient allocation is independent of property-rights assignment; transaction costs make rights assignment decisive. Establishes centrality of transaction costs to institutional design.
- … descriptive of market outcomes — markets achieve Pareto efficiency only under strong assumptions; when these fail (externalities, public goods, information asymmetries, market power), market allocations can be Pareto-inefficient (see externality and tragedy_of_the_commons as cross-DP reference candidates).
- Property Rights
- The Coase theorem makes the role of property rights precise: given well-defined rights and sufficiently low transaction costs, parties will bargain to an efficient outcome regardless of how the rights are initially allocated, so that the assignment affects distribution but not the final efficient use.
This sourceFoundational formulation of Coase Theorem: absent transaction costs, efficient allocation is independent of property-rights assignment; transaction costs make rights assignment decisive. Establishes centrality of transaction costs to institutional design.
- The Coase theorem makes the role of property rights precise: given well-defined rights and sufficiently low transaction costs, parties will bargain to an efficient outcome regardless of how the rights are initially allocated, so that the assignment affects distribution but not the final efficient use.
- Public Goods
This sourceFoundational formulation of Coase Theorem: absent transaction costs, efficient allocation is independent of property-rights assignment; transaction costs make rights assignment decisive. Establishes centrality of transaction costs to institutional design.
- Tragedy of the Commons
- The review_flag `multi_origin_equal` reflects the construct's substantive contributions from multiple disciplines: ecology/biology (Hardin 1968), economics (externality theory, public-goods theory via Samuelson 1954, property-rights theory via Coase
This sourceFoundational formulation of Coase Theorem: absent transaction costs, efficient allocation is independent of property-rights assignment; transaction costs make rights assignment decisive. Establishes centrality of transaction costs to institutional design.
- The review_flag `multi_origin_equal` reflects the construct's substantive contributions from multiple disciplines: ecology/biology (Hardin 1968), economics (externality theory, public-goods theory via Samuelson 1954, property-rights theory via Coase
- Transaction Costs
- Oliver Williamson's transaction-cost economics and the 2009 Nobel Prize for analysis of economic governance. Oliver Williamson (UC Berkeley), building on Ronald Coase's 1937 "Nature of the Firm" () and 1960 "Problem of Social Cost" (
This sourceFoundational formulation of Coase Theorem: absent transaction costs, efficient allocation is independent of property-rights assignment; transaction costs make rights assignment decisive. Establishes centrality of transaction costs to institutional design.
- Oliver Williamson's transaction-cost economics and the 2009 Nobel Prize for analysis of economic governance. Oliver Williamson (UC Berkeley), building on Ronald Coase's 1937 "Nature of the Firm" () and 1960 "Problem of Social Cost" (
Mechanisms¶
- Side-Payment Compensation Package
- This is the practical face of the Coase theorem — when a move creates more value than it destroys
This sourceShows that bargaining and a compensating payment can permit a higher-value arrangement while compensating affected losers.
- This is the practical face of the Coase theorem — when a move creates more value than it destroys
- Territory or Domain Allocation
- Assigning exclusive domains is the coordination benefit behind well-defined property rights — as the Coase insight has it, once boundaries are clear, the parties can resolve overlaps among themselves rather than fighting the same ground repeatedly.
This sourceExplains that parties can rearrange legally delimited rights through market transactions when transaction costs permit.
- Assigning exclusive domains is the coordination benefit behind well-defined property rights — as the Coase insight has it, once boundaries are clear, the parties can resolve overlaps among themselves rather than fighting the same ground repeatedly.
Verification¶
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