The Coase Theorem, Private Information, and the Benefits of Not Assigning Property Rights
9 Pages Posted: 13 Apr 2001
Using a simple bilateral trading example with discrete valuations and costs (based on Matsuo, Journal of Economic Theory, 1989), this note demonstrates that in the presence of private information the efficiency of Coasean bargaining may in some situations be strictly enhanced if initially no property rights are assigned.
Keywords: Property rights, Bargaining, Private information, Coase theorem
JEL Classification: K11, D82
Suggested Citation: Suggested Citation