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The Coase Theorem, Private Information, and the Benefits of Not Assigning Property Rights

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Abstract

Using a simple bilateral trading example with discrete valuations and costs it is demonstrated that in the presence of private information the efficiency of Coasean bargaining may be strictly enhanced if initially no property rights are assigned.

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Authors and Affiliations

  1. Department of Law and Economics, Wirtschaftspolitische Abteilung, University of Bonn, Adenauerallee 24-42, D-53113, Bonn, Germany

    Patrick W. Schmitz

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  1. Patrick W. Schmitz
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Schmitz, P.W. The Coase Theorem, Private Information, and the Benefits of Not Assigning Property Rights. European Journal of Law and Economics 11, 23–28 (2001). https://doi.org/10.1023/A:1008709628107

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  • DOI: https://doi.org/10.1023/A:1008709628107

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