The Coase Theorem Explained: Coasean Bargaining Definition, Conditions/Assumptions and Examples

[@OneMinuteEconomics]

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[@Ls-jz7xe]

Economics - The subject of naming simple things and concepts that do not need explaining just to make you memorize names of theorems.

[@OneMinuteEconomics]

Not sure if you were defining school or economics :P

[@Victoriakid1012]

Thanks for a simple and straight-to-the-point video. I'm taking PAD-251 right now and every article I find online makes it extremely difficult to understand.

[@erobos111]

An associate of mine asked me to look into this "Coase Theorem" idea and I really don't have lots of time to devote to this subject, so thank you for making this fun, informative anime about it. Very well done!

[@OneMinuteEconomics]

Thanks a lot for taking the time to say something positive, really appreciate it :)

[@laurenyoung7063]

Thank you!! I am a 1L law student and this helped explain a contracts concept I was having such a hard time understanding!!

[@OneMinuteEconomics]

Awesome, happy to hear that Lauren! :)

[@SuperDoge]

Short and concise! Well done!

[@OneMinuteEconomics]

Thanks so much for the kind words, comments like yours mean way more to me than people realize :)

[@florentin4061]

A better alternative would be the pigouvian tax, or what do you suggest?

[@ThePeterDislikeShow]

Could coase theorem be used to negotiate vacation and working hours between coworkers? E.g., in theory you could decide who needs the time off more by having a market for it.

[@dostthouevenlogicbrethren1739]

your analysis is based on the current system of legality which doesn't uphold Coasean property rights under law. This was entirely the purpose of common law under traditional systems. British courts, to this day, do not use actual judges in courts to handle such small matters. They use voluntary public servants who fill in in these cases that don't require a judge. They are called Magistrates. Their sole purpose was in handling these sorts of claims. It was government regulations and bylaws in the first place that created the legal nightmare involved in dealing with these issues in court, that render Coase theorem difficult to work out. The solution isn't more government regulation and intervention to fix the problem created by government regulation and intervention, imposed to solve an issue that doesn't exist without government intervention and regulation. Put it simple: Politicians get elected for the purpose of imposing regulations on externalities that favour those whom they seek to gain the votes of. It therefore, should come as no surprise that these politicians will seek to externalize issues as much as they can, in ways that will allow them to hold office. Reduce bureaucracy and government intervention, give back property rights to individuals, and let the courts utilize proper common law, and the Coase theorem will be able to function with profoundly more successful outcomes than modern bureaucracy does...and at marginally less cost. Assuming that the cost of Coasean intervention would be higher than our current government intervention is fundamentally flawed. Government intervention is profoundly costly, and not only because it consumes more money in creating departments to deal with these issues, but also in that it incentivizes people to not fix the issues in the first place. Public Choice Theory tells us that removing the motivation to seek profits, an organization will seek to satisfy their internal desires: keeping the employees happy, paid, and working with as little work as possible.

[@OneMinuteEconomics]

I agree 100% that it would be foolish to state that just because the Coasean approach is anything but status quo at this point in time, it cannot work under other political systems. However, at the same time, I do have to point out that while a compelling libertarian case can be made (you've done just that), there's little in the way of even reasonably decent empirical validation. So far at least. While this lack of "evidence" should not lead to a "there's no evidence, therefore it isn't possible" conclusion which would make little logical sense, I believe it's equally premature to draw conclusions in the opposite direction. Personally, I just accept that "we don't know" will just have to do in cases such as this one.

[@subrotochatterjee5788]

One Minute Economics The creation of government presents problems: One, We need the government to protect us (citizens), and this creates the second problem of asymmetric power distribution, with the governments holding the upper hand. In theory, the citizens hold the upper hand, but in reality, it’s the government. We know this. Self-serving politicians and citizens keep this imbalance alive, albeit unwittingly. Who wins if Coase’s theorem actually works? Evidently, it’s those who are willing to go through its gamut. Inequity, perceived or otherwise, greed, and dissatisfaction generally drives the legal system and governments to nix the Theorem.

[@andrewscott864]

Great video

[@OneMinuteEconomics]

Thanks Andrew :)

[@sylwester6601]

super helpful, thanks so much!

[@OneMinuteEconomics]

You're more than welcome Sylwester, really glad you found the video helpful! :)

[@leasyy__1483]

THANK YOU!

[@OneMinuteEconomics]

Thank YOU for taking the time to write a supportive comment :)

[@OneMinuteEconomics]

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[@anjaleemadhushanip.k2964]

Thanks a lot.

[@OneMinuteEconomics]

Thank YOU for the kind words Anjalee :)

[@kevyhot]

Thank you so much

[@OneMinuteEconomics]

You are more than welcome :)

[@chakraqi6887]

Something there

[@siljo.]

didn't know Jesse Eisenberg taught Economics

[@OneMinuteEconomics]

Step 1) Googled the name "Jesse Eisenberg" since I had no idea who that was Step 2) Realize he's the guy who played Zuck Step 3) Internet points granted :)