Solum’s Outline of the Coase Theorem

Published on September 5, 2005 in Law and Economics. 1 Comment

Here is a very brief, highly readable explanation of the critical insight underlying the Coase theorem, courtesy of Larry Solum.

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1 Response to “Solum’s Outline of the Coase Theorem”

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  • Ben Samuel Nelson
    October 8, 2006 at 11:23 am

    Isn’t that explanation invalid on its own terms? In scenario B, where the plaintiff has to pay for externalities, he also must pay an inducement fee (one dollar, in this example). Isn’t that less “efficient” than scenario A, where the accused has to pay?

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