Anderlini, Luca and Felli, Leonardo (2000) Transaction costs and the robustness of the Coase Theorem. . Suntory and Toyota International Centres for Economics and Related Disciplines, London, UK.
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Abstract
This paper explores the extent to which the presence of ex-ante transaction costs may lead to failures of the Coase Theorem. In particular we identify and investigate the basic ‘hold-up problem’ which arises whenever the parties to a Coasian negotiation have to pay some ex-ante costs for the negotiation to take place. We then show that a ‘Coasian solution’ to this hold-up problem is not available. This is because a Coasian solution to the hold-up problem typically entails a negotation about the payment of the costs associated with the future negotiation which in turn is associated with a fresh set of ex-ante costs, and hence with a new hold-up problem.
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | http://sticerd.lse.ac.uk/ |
| Additional Information: | © 2000 Luca Anderlinie and Leonardo Felli. |
| Divisions: | Financial Markets Group STICERD Economics |
| Subjects: | H Social Sciences > HB Economic Theory |
| JEL classification: | D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D80 - General C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C70 - General D - Microeconomics > D2 - Production and Organizations > D23 - Organizational Behavior; Transaction Costs; Property Rights D - Microeconomics > D6 - Welfare Economics > D60 - General |
| Date Deposited: | 28 Feb 2008 |
| Last Modified: | 15 Sep 2023 22:48 |
| URI: | http://eprints.lse.ac.uk/id/eprint/3591 |
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