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In: Economics

Describe an example of a problem that could be solved using the Coase theorem. Do this...

Describe an example of a problem that could be solved using the Coase theorem. Do this by defining a hypothetical situation where one individual is causing a negative externality on another individual. Describe whether it matters who holds property rights. Define the three necessary conditions for Coase theorem to work completely. Describe why a failure of these conditions will likely cause Coasian bargaining to fail.

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