|Mause I 157
Allocation/Coase: In a model world of perfect allocation of purely private goods, externality problems of all kinds are unknown. This is also due to the assumed non-existence of transaction costs, i.e. monetary or time costs of negotiating, monitoring and enforcing contracts.
Coase theorem: if and to the extent that individuals can negotiate for free on the exchange of goods and rights thereto, the initial distribution of rights of disposal is irrelevant for achieving allocation efficiency. External effects (influencing the market through decisions of uninvolved parties) therefore do not occur. (1)
1. R. Coase, The problem of social cost. Journal of Law and Economics 3, 1960, p. 1– 44._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. The note [Author1]Vs[Author2] or [Author]Vs[term] is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.
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