The proposition that if property rights are well defined and if bargaining is costless, then the private market can achieve an efficient outcome regardless of which of the affected parties hold the property rights is known as the:
A) Coase theorem.
B) property rights paradigm.
C) market rights theorem.
D) green environment paradigm.

Question

Quizplus · Accepted Answer

The proposition described in the question is known as the Coase theorem, named after economist Ronald Coase who developed it in his paper "The Problem of Social Cost". It states that in the absence of transaction costs, the private market can reach an efficient outcome regardless of the initial allocation of property rights. This is because the parties involved can negotiate with each other until they reach a mutually beneficial arrangement.

The Proposition That If Property Rights Are Well Defined and If