Talk:Coase theorem
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[edit] Earlier comments
I removed "(although no definite mathematical version of it has ever been stated or proved)" because that's mistaken. I added a link to a proof of a version just as a nice example on the web, but this is hardly the only example. Jimbo Wales 23:58, 21 Nov 2004 (UTC)
[edit] Nobel prize
I corrected the mention of Coase winning a Nobel prize to the Bank of Sweden Prize in Economic Sciences. There is no such thing as a "Nobel prize in Economics". While the Bank of Sweden prize is awarded "in memory of Alfred Nobel", it is entirely unconnected with the Nobel Foundation, and the use of Nobel's name has been opposed by the foundation since the creation of the Bank of Sweden prize. Corvus 18:11, 27 Feb 2005 (UTC)
[edit] Images
I created some images. You can find them in the german version of this text. You may want to translate them. Stern 01:04, 3 Mar 2005 (UTC)
[edit] Clarification regarding criticism
The part about "Other major theoretical arguments ..." is alternately unclear and false. That different actors have different valuations of property does not undermine the Coase theorem -- it's the whole point. It's also, in fact, the whole point of trade -- if everyone had the same value of everything, we would all be islands. The rest of the sentence is an argument against the "Strong form Invariance Hypothesis," which is valid but irrelevant. When the theorem says that initial allocation of property rights "does not matter," it doesn't mean "does not affect the outcome." If means "will lead to some outcome that will be efficient. Income & wealth effects may change who has the highest willingness to pay, but it doesn't change the fact that post hoc, it goes to the highest valued use.
Also, the "three factors inhibiting efficient allocation" are duplicative -- #1 and #3 are types of transactions costs.
- I, too, was about to write about the fact that #1 and #3 are transaction costs. I'll go and correct it now. --Tmh 13:03, 12 July 2006 (UTC)
- In effect, this chapter:
- Other major theoretical arguments against the theorem propose that in some situations different actors may have irreconcilable different valuations of property because of unique ability to use and that in some asymmetrical exchanges one party may be unable to procure sufficient capital because of the risk-aversion of financial institutions.
- Simply tries to refute Coase's theorem with a normative distributive argument, which is pretty much the oldest, most simple misunderstanding. Naturally with Coase's theorem, as with any other economic transaction, we have a wealth effect. If you can't afford a car, you won't buy a car. If you can't afford to buy your neighbours to shut up during the night, you won't buy silence. The fact that property rights allocations have a distributive effect as well as the allocative effect doesn't change the fact. We can, of course, continue the discussion on the point of whether it's smart to misallocate property rights to inefficient uses for distributive purposes, but I think it's a bit far-fetched to place this discussion on a page discussion Coase theorem. --Tmh 13:24, 12 July 2006 (UTC)
- One more thing: I am inclined to remove the "a critical view" link, since it doesn't provide any positive, commonly accepted criticism of the theorem. Instead it seems to wander around on normative criticism of policy advice it supposes is implied by coasean externality analysis. Of course, no such policy advice is implied; the theorem is a positive scientific theorem, not a hodgepodge that mixes the normative and the positive in a textbook example of a moralistic fallacy. --Tmh 14:39, 12 July 2006 (UTC)
[edit] sigh
the broad conclusion of the coase theorem is that free market actors are more efficient than central planners (this is why it is controversial at third rate schools that claim to teach "economics" but in reality are just shills for modern day centralists and despots [eg. paul krugman])
judging from the poor explanation in this article and the focus on criticism i assume the author(s) learned about the theorem at a third or second rate econ school
