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How to negotiate with Coase?

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Author Info

  • Jean-Christophe PEREAU (GREThA, UMR CNRS 5113)
  • Sébastien ROUILLON (GREThA, UMR CNRS 5113)

Abstract

This article analyses the bargaining side of the Coase theorem in a 3-player strategic framework. We consider several bilateral bargaining protocols between two firms polluting one household (the victim). Our results show that when property rights are given to the victim, he prefers to bargain separetely and simultaneously with the two firms. However when property rights are given to the firms, they prefer to bargain sequentially with the household. This last configuration yields a non optimal outcome and invalidates the bargaining Coase theorem.

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File URL: http://cahiersdugretha.u-bordeaux4.fr/2011/2011-02.pdf
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Bibliographic Info

Paper provided by Groupe de Recherche en Economie Théorique et Appliquée in its series Cahiers du GREThA with number 2011-02.

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Date of creation: 2011
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Handle: RePEc:grt:wpegrt:2011-02

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Related research

Keywords: Coase theorem; delegation; non cooperative bargaining; property rights; sequential negotiation; simultaneous negotiation;

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