Calabresi, ‘Law and Economics’ and the Coase Theorem

ICER Working Paper No. 26/2010

34 Pages Posted: 19 Nov 2010 Last revised: 28 Feb 2016

See all articles by Alain Marciano

Alain Marciano

Universita degli Studi di Torino; Karl Mittermaier Centre for Philosophy of Economics, University of Johannesburg; George Mason University - Mercatus Center

Date Written: November 17, 2010

Abstract

In this paper, we show that, in 1961 and before he had read "The Problem of Social Cost", Calabresi reached exactly the same conclusions as the one reached by Coase and summarized by Stigler as the "Coase theorem" but he believed that this result was valid only in the theoretical world of the economists. We also analyze how Calabresi's thought evolved, in particular including transaction costs in his reasoning, but nonetheless remained faithful to his conclusions about the practical validity of the Coase theorem. Calabresi's conclusions remained ignored by economists and by most of legal scholars until the early 1970s. It was only when scholars started to emphasize the unrealistic assumptions upon which rest the Coase theorem that they also started to pay attention to Calabresi. His works were quoted and essentially used to emphasize the limits of the Coase theorem. Calabresi and Coase were then put on the same footing; the works of the former presented as more complete and more practical than the works of the later.

Keywords: Calabresi, Economic Analysis of Law, Coase Theorem, Invariance, Problem of Social Cost

JEL Classification: A12, B2, B31, K0

Suggested Citation

Marciano, Alain, Calabresi, ‘Law and Economics’ and the Coase Theorem (November 17, 2010). ICER Working Paper No. 26/2010 , Available at SSRN: https://ssrn.com/abstract=1710608 or http://dx.doi.org/10.2139/ssrn.1710608

Alain Marciano (Contact Author)

Universita degli Studi di Torino ( email )

Dipartimento di Economia e Statistica
Lungo Dora Siena, 100
Torino, 10153
Italy

Karl Mittermaier Centre for Philosophy of Economics, University of Johannesburg ( email )

Johannesburg
South Africa

George Mason University - Mercatus Center

VA
United States

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