Publication details
Platnost Coaseho teorému - některé kritické poznámky
| Title in English | Coase theorem validity - some critical notes |
|---|---|
| Authors | |
| Year of publication | 2006 |
| Type | Article in Periodical |
| Magazine / Source | Ekonomická revue |
| MU Faculty or unit | |
| Citation | |
| Field | Economy |
| Keywords | Coase theorem; Initial property rights distribution; Private negotiations; Interventions of government; Pareto efficiency |
| Description | This article deals with Coase theorem and valuation of its result in imaginary world of transaction costs being zero. It keeps on examining of the same example as professor Coase did a cattle raiser and a crop-farmer (both in neighbourhood) and examines both cases the cattle raiser is liable for damage and is not liable for damage. Furthermore there are considered four various events: nothing happens, who is liable moves away (and carry on doing his job under worse conditions where the costs are rising up and benefits decline), then negotiations are done and who is liable will pay the damage or he will build the hedge. There are considered both economic and account benefits and costs in each case. I argue that these both cases (as regards liability for damage) have not to end inevitably in the same result of Pareto efficiency and I emphasize that it depends on initial property rights distribution what the result will be. Thus I say, initial property rights distribution is crucial The difference is emphasized when economic and accounting profit is thought apart. I try to return to the solution of professor Pigou and try to modify it regarding identification of the world with zero transaction costs and the real world we are living in. Moreover the article should emphasize the right interpretation of Coase theorem as it is mentioned wrong in many textbooks which refer to microeconomics and history of economic thought. |
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