The Coase Theorem Volume I Origins, Restatements and Extensions Edited by Richard A. Posner Judge, United States Court of Appeals for the Seventh Circuit and Senior Lecturer, University of Chicago Law School, USA and Francesco Parisi Oppenheimer Wolff and Donnelly Professor of Law University of Minnesota Law School, USA and Professor of Economics University of Bologna, Italy ECONOMIC APPROACHES TO LAW An Elgar Research Collection Cheltenham, UK Northampton, MA, USA
Contents Acknowledgements Introduction Francesco Parisi and Richard A. Posner Vll ix PART I PART II PART III THE SOURCES 1. R.H. Coase (1959), 'The Federal Communications Commission', Journal of Law and Economics, 2, October, 1-40 3 2. R.H. Coase (1960), 'The Problem of Social Cost', Journal of Law and Economics, 3, October, 1 44 43 3. R.H. Coase (1988), 'Notes on the Problem of Social Cost', in The Firm, the Market, and the Law, Chapter 6, Chicago, IL: University of Chicago Press, 157-85 87 THE POSITIVE RESTATEMENTS 4. Harold Demsetz (1964), 'The Exchange and Enforcement of Property Rights', Journal of Law and Economics, 7, October, 11-26 119 5. George j. Stigler (1966), 'Costs and Production', in The Theory of Price, 3 rd Edition, Chapter 6, New York, NY: Macmillan Company, 104-20 135 6. George J. Stigler (1989) 'Two Notes on the Coase Theorem', Yale Law Journal, 99 (3), December, 631-3 152 7. Richard A. Posner (2011), '3.6 Incompatible Uses' from Chapter 3 'Property' in Economic Analysis of Law 8,h Edition, Austin, TX: Wolters Kluwer Law and Business, 63-9 155 THE NORMATIVE COROLLARIES 8. Guido Calabresi and A. Douglas Melamed (1972), 'Property Rules, Liability Rules, and Inalienability: One View of the Cathedral', Harvard Law Review, 85 (6), April, 1089-1128 165 9. Ian Ayres and Eric Talley (1995), 'Solomonic Bargaining: Dividing a Legal Entitlement to Facilitate Coasean Trade', Yale Law Journal, 104 (5), March, 1027-1117 205 10. Louis Kaplow and Steven Shavell (1996), 'Property Rules Versus Liability Rules: An Economic Analysis', Harvard Law Review, 109 (4), February, 715-90 296 11. Barbara Luppi and Francesco Parisi (2011), 'Toward an Asymmetric Coase Theorem', European Journal of Law and Economics, 31 (1), February, 111-22 372
vi PART IV PART V The Couse Theorem I COASE THEOREM AND COASEANISM 12. Robert C. Ellickson (1989), 'The Case for Coase and Against "Coaseanism"', Yale Law Journal, 99 (3), December, 611-30 387 13. E. Ray Canterbery and A. Marvasti (1992), 'The Coase Theorem as a Negative Externality', Journal of Economic Issues, 26 (4), December, 1179-89 407 14. Daniel A. Farber (1997), 'Parody Lost/Pragmatism Regained: The Ironic History of the Coase Theorem', Virginia Law Review, 83 (2), March, 397-428 418 15. Deirdre McCloskey (1998), 'The So-Called Coase Theorem', Eastern Economic Journal, 24 (3), Summer, 367-71 450 16. Edward Glaeser, Simon Johnson and Andrei Shleifer (2001), 'Coase Versus the Coasians', Quarterly Journal of Economics, 116 (3), August, 853-99 455 17. Steven G. Medema (1994), 'The Myth of Two Coases: What Coase is Really Saying', Journal of Economic Issues, 28 (1), March, 208-17 502 THE INTELLECTUAL LEGACY 18. Richard A. Posner (1993), 'Nobel Laureate: Ronald Coase and Methodology', Journal of Economic Perspectives, 1 (4), Autumn, 195-210 515 19. Richard A. Epstein (1993), 'Holdouts, Externalities, and the Single Owner: One More Salute to Ronald Coase', Journal of Law and Economics, 36 (1), April, 553-86 531 20. Guido Calabresi (1991), 'The Pointlessness of Pareto: Carrying Coase Further', Yale Law Journal, 100 (5), March, 1211-37 565 21. Stewart Schwab (1989), 'Coase Defends Coase: Why Lawyers Listen and Economists Do Not', Michigan Law Review, 87 (6), May, 1171-98 592 22. Fred R. Shapiro (1996), 'Most-Cited Law Review Articles Revisited', Chicago-Kent Law Review, 71 (3), 767-79 620 23. R.H. Coase (1996), 'The Problem of Social Cost: The Citations', Chicago-Kent Law Review, 71 (3), 809-12 633
The Coase Theorem Volume II Criticisms and Applications Edited by Richard A. Posner Judge, United States Court of Appeals for the Seventh Circuit and Senior Lecturer, University of Chicago Law School, USA and Francesco Parisi Oppenheimer Wolff and Donnelly Professor of Law University of Minnesota Law School, USA and Professor of Economics University of Bologna, Italy ECONOMIC APPROACHES TO LAW An Elgar Research Collection Cheltenham, UK Northampton, MA, USA &
Contents Acknowledgements An Introduction by editors to both volumes appears in Volume I ix PARTI PART II PART III SURVEYS AND APPLICATIONS 1. A. Mitchell Polinsky (2011), The Coase Theorem', 'First Application-Nuisance Law', 'Second Application-Breach of Contract' and 'Third Application-Automobile Accidents', in An Introduction to Law and Economics, Chapter 3, Chapter 4, Chapter 5 and Chapter 6, 4 lh Edition, New York, NY: Wolters Kluwer Law, 13-16, 17-27, 29-41 and 43-56 2. James Halteman (2005), 'Externalities and the Coase Theorem: A Diagrammatic Presentation', Journal of Economic Education, 36 (4), Fall, 385-90 3. Robert D. Cooter (1987), 'Coase Theorem', in John Eatwell, Murray Milgate and Peter Newman (eds) The New Palgrave: A Dictionary of Economics, Volume /, London, UK: Macmillan, 457-60 4. Francesco Parisi (2008), 'Coase Theorem', in Lawrence E. Blume and Steven N. Durlauf (eds), The New Palgrave: A Dictionary of Economics, Volume /, 2 nd Edition, London, UK: Macmillan, 855-61 COASEAN BARGAINING IN THE SHADOW OF THE LAW 5. Robert C. Ellickson (1986), 'Of Coase and Cattle: Dispute Resolution Among Neighbors in Shasta County', Stanford Law Review, 38 (3), February, 623-87 6. Kenneth R. Vogel (1987), 'The Coase Theorem and California Animal Trespass LawJournal of Legcd Studies, 16 (1), January, 149-87 7. Timothy R. Hylan, Maureen J. Lage and Michael Treglia (1996), 'The Coase Theorem, Free Agency, and Major League Baseball: A Panel Study of Pitcher Mobility from 1961 to 1992', Southern Economic Journal, 62 (4), April, 1029-42 COASE THEOREM AND THE CONSTITUTION 8. James M. Buchanan (1973), 'The Coase Theorem and the Theory of the State', Natural Resources Journal, 13, 579-94 9. J. Gregory Sidak (1991), 'The Inverse Coase Theorem and Declarations of War', Duke Law Journal, 41 (2), November, 325-8 3 45 51 55 65 130 169 185 201
VI The Coase Theorem II PART IV PART V PART VI COASE THEOREM AND POLITICAL MARKETS 10. Varouj A. Aivazian, Jeffrey L. Callen and Irwin Lipnowski (1987), 'The Coase Theorem and Coalitional Stability', Economica, 54 (216), November, 517-20 207 11. Peter Bernholz (1997), 'Property Rights, Contracts, Cyclical Social Preferences and the Coase Theorem: A Synthesis', European Journal of Political Economy, 13 (3), September, 419^12 211 12. Peter Bernholz (1999), 'The Generalized Coase Theorem and Separable Individual Preferences: An Extension', European Journal of Political Economy, 15 (2), June, 331-35 235 13. Francesco Parisi (2003), 'Political Coase Theorem', Public Choice, 115 (1/2), April, 1-36 240 DOES LIABILITY MATTER? COASE THEOREM IN THE LONG-RUN 14. Stanislaw Wellisz (1964), 'On External Diseconomies and the Government-Assisted Invisible Hand ', Economica New Series, 31 (124), November, 345-62 279 15. G. Warren Nutter (1968), 'The Coase Theorem on Social Cost: A Footnote', Journal of Law and Economics, 11 (2), October, 503-7 297 16. Guido Calabresi (1968), 'Transaction Costs, Resource Allocation and Liability Rules - A Comment', Journal of Law and Economics, 11 (1), April, 67-73 302 17. Harold Demsetz (1972), 'When Does the Rule of Liability Matter?', Journal of Legal Studies, 1 (1), January, 13-28 309 18. Donald H. Regan (1972), 'The Problem of Social Cost Revisited', Journal of Law and Economics, 15 (2), October, 427-37 325 19. William Schulze and Ralph C. D'Arge (1974), 'The Coase Proposition, Information Constraints and Long-Run Equilibrium', American Economic Review, 64 (4), September, 763-72 336 OTHER THEORETICAL CRITIQUES 20. Paul Samuelson (1995), 'Some Uneasiness with the Coase Theorem ', Japan and the World Economy, 7(1), May, 1-7 349 21. Robert Cooter (1982), 'The Cost of Coase', Journal of Legal Studies, 11 (1), January, 1-33 356 22. Avinash Dixit and Mancur Olson (2000), 'Does Voluntary, Participation Undermine the Coase Theorem?', Journal of Public Economics, 76 (3), June, 309-35 389 23. Luca Anderlini and Leonardo Felli (2006), 'Transaction Costs and the Robustness of the Coase Theorem', Economic Journal, 116 (508), January, 223-45 416 24. Ken-Ichi Inada and Kiyoshi Kuga (1973), 'Limitations of the "Coase Theorem" on Liability Rules', Journal of Economic Theory, 6 (6), December, 606-13 439
The Coase Theorem II vii 25. Varouj A. Aivazian and Jeffrey L. Callen (1981), The Coase Theorem and the Empty Core', Journal of Law and Economics, 24(1), April, 175-81 447 26. A.W. Brian Simpson (1996), '"Coase v. Pigou" Reexamined', Journal of Legal Studies, 25 (1), January, 53-97 454 PART VII EXPERIMENTAL TESTS OF THE COASE THEOREM 27. Elizabeth Hoffman and Matthew L. Spitzer (1982), The Coase Theorem: Some Experimental Tests', Journal of Law and Economics, 25 (1), April, 73-98 501 28. Glenn W. Harrison and Michael McKee (1985), 'Experimental Evaluation of the Coase Theorem', Journal of Law and Economics, 28 (3), October, 653-70 527 29. Elizabeth Hoffman and Matthew L. Spitzer (1986), 'Experimental Tests of the Coase Theorem with Large Bargaining Groups', Journal of Legal Studies, 15 (1), January, 149-71 545 30. Glenn W. Harrison, Elizabeth Hoffman, E.E. Rutstrom and Matthew L. Spitzer (1987), 'Coasian Solutions to the Externality Problem in Experimental Markets', Economic Journal, 97 (386), June, 388-402 568 31. Daniel Kahneman, Jack L. Knetsch and Richard H. Thaler (1990), 'Experimental Tests of the Endowment Effect and the Coase Theorem', Journal of Political Economy, 98 (6), December, 1325-48 ' 583 32. Varouj A. Aivazian, Jeffrey L. Callen and Susan McCracken (2009), 'Experimental Tests of Core Theory and the Coase Theorem: Inefficiency and Cycling', Journal of Law and Economics, 52 (4), November, 745-59 607