Principles of Microeconomics / Unit 11 MIC 1011 short lesson, about 20 seconds
Property Rights and the Coase Theorem
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The idea
If property rights are well defined and bargaining is costless, the parties reach the efficient outcome themselves, whichever side holds the right. The right decides who pays, not the outcome.
In practice
Whoever owns the river, the cheapest fix gets bought.
Where people slip
The conditions rarely hold with many polluters and victims, so regulators exist; the theorem still shows what any remedy tries to reproduce.
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