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Why Would The Coase Theorem Not Work?

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Why Would The Coase Theorem Not Work? This is because people generally exhibit an endowment effect, in which they value something more once they actually have possession of it. Thus, the Coase Theorem would not always work in practice because initial allocations of property rights would affect the end result of the negotiations. What problems

How Does Coase Theorem Solve Externalities?

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How Does Coase Theorem Solve Externalities? Coase theorem seeks to solve negative externalities by assigning well defined property rights. In turn, two parties can negotiate based on the cost of that externality and the price they are willing to accept in order to reduce such. How can we solve the problem of externalities? Defining property