Apr 25, 2014

Kindergarten Coase

In a world where bargaining can occur without any costs or effort, voluntary bargains between individuals lead society to the best possible outcome. When there are disputes between parties in this easy-bargaining world, government involvement can change the relative bargaining strength of the disputing parties, but not the ultimate outcome for society; the bargaining process will pick up where the government leaves off and continue along the same path as before until society reaches its ideal destination. 
The article, by Jeremy Kidd (March 2014), is here. HT: Mostly Economics

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