Tuesday, April 24, 2007
Parisi on the Intellectual History of the Coase Theorem
Posted by Mary L. Dudziak
Francesco Parisi, University of Minnesota, has posted a short essay, Coase Theorem, forthcoming in the NEW PALGRAVE DICTIONARY OF ECONOMICS, 2nd ed., L. Blume and S. Durlaufe, eds. Here's the abstract: The Coase Theorem holds that, regardless of the initial allocation of property rights and choice of remedial protection, the market will determine ultimate allocations of legal entitlements, based on their relative value to different parties. Coase's assertion has occasioned intense debate. This article provides an intellectual history of Coase's fundamental theorem and surveys the legal and economic literature that has developed around it. It appraises the most notable attacks to the Coase Theorem, and examines its methodological implications and normative and practical significance in legal and policy settings.