Question

In: Economics

Answer True, False or Undetermined: The coarse theorem implies that both parties are indifferent about the...

Answer True, False or Undetermined:

The coarse theorem implies that both parties are indifferent about the allocation of property rights, since in any case the outcome will be efficient

Solutions

Expert Solution

The answer is false .Coase theorem defined that efficient outcome will be possible through negotiating or bargaining techniques only if the property rights are clearly defined,assigned and enforced .So here in this scenario both the parties are negligible towards the allocation of property rights hence efficient outcome may not be possible.


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