IDEAS home Printed from https://ideas.repec.org/a/kap/atlecj/v31y2003i2p133-145.html
   My bibliography  Save this article

Teaching the coase theorem: Are we getting it right?

Author

Listed:
  • Michael Butler
  • Robert Garnett

Abstract

The authors examine current textbook representations of Coase's analysis of negative externalities [Coase, 1960]. Standard treatments identify Coase's ideas with Stigler's Coase Theorem: a zero transaction cost world in which efficient solutions emerge automatically, regardless of legal rules and the initial allocation of rights. Yet Coase's seminal paper breaks from this mode of analysis. The authors use this intellectual history to distinguish two approaches to negative externalities: blackboard (Pigou, Stigler, Samuelson) and Coasean. They survey 45 microeconomics textbooks and find that 80 percent misrepresent Coase's arguments. They argue that a Coasean approach increases students' critical thinking skills by challenging them to move beyond simple laissez faire or interventionist solutions. Copyright International Atlantic Economic Society 2003

Suggested Citation

  • Michael Butler & Robert Garnett, 2003. "Teaching the coase theorem: Are we getting it right?," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 31(2), pages 133-145, June.
    • Handle: RePEc:kap:atlecj:v:31:y:2003:i:2:p:133-145
    DOI: 10.1007/BF02319866
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/BF02319866
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/BF02319866?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hirshleifer,Jack & Glazer,Amihai & Hirshleifer,David, 2005. "Price Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521523424, Enero-Abr.
    2. Warren J. Samuels & Steven G. Medema & A. A. Schmid, 1997. "The Economy as a Process of Valuation," Books, Edward Elgar Publishing, number 1088, December.
    3. Tibor Scitovsky, 1954. "Two Concepts of External Economies," Journal of Political Economy, University of Chicago Press, vol. 62(2), pages 143-143.
    4. Klaes, Matthias, 2000. "The History of the Concept of Transaction Costs: Neglected Aspects," Journal of the History of Economic Thought, Cambridge University Press, vol. 22(2), pages 191-216, June.
    5. Richard A. Posner, 1993. "Ronald Coase and Methodology," Journal of Economic Perspectives, American Economic Association, vol. 7(4), pages 195-210, Fall.
    6. Deirdre N. McCloskey, 1998. "Other Things Equal: The So-Called Coase Theorem," Eastern Economic Journal, Eastern Economic Association, vol. 24(3), pages 367-371, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Leslie Rosenthal, 2007. "Economic Efficiency, Nuisance, and Sewage: New Lessons from Attorney-General v. Council of the Borough of Birmingham, 1858–95," The Journal of Legal Studies, University of Chicago Press, vol. 36(1), pages 27-62, January.
    2. Yalcintas, Altug, 2011. "On error: undisciplined thoughts on one of the causes of intellectual path dependency," MPRA Paper 37911, University Library of Munich, Germany.
    3. Yalcintas, Altug, 2010. "The ‘Coase Theorem’ vs. Coase theorem proper: How an error emerged and why it remained uncorrected so long," MPRA Paper 37936, University Library of Munich, Germany.
    4. Tamara Todorova, 2007. "The Coase Theorem Revisited: Implications for Economic Transition," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(2), pages 189-201, June.
    5. Andrew Halpin, 2011. "Coase’s world and Coase’s blackboard," European Journal of Law and Economics, Springer, vol. 31(1), pages 91-109, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tamara Todorova, 2007. "The Coase Theorem Revisited: Implications for Economic Transition," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 35(2), pages 189-201, June.
    2. Alain Marciano, 2019. "Ronald H. Coase (1910–2013)," Palgrave Macmillan Books, in: Robert A. Cord (ed.), The Palgrave Companion to LSE Economics, chapter 0, pages 555-577, Palgrave Macmillan.
    3. Steven G. Medema, 2020. "The Coase Theorem at Sixty," Journal of Economic Literature, American Economic Association, vol. 58(4), pages 1045-1128, December.
    4. Jaza Folefack, Achille Jean & Darr, Dietrich, 2021. "Promoting cocoa agroforestry under conditions of separated ownership of land and trees: Strengthening customary tenure institutions in Cameroon," Land Use Policy, Elsevier, vol. 108(C).
    5. Alain Marciano, 2010. "Calabresi, "law and economics" and the Coase theorem," ICER Working Papers 26-2010, ICER - International Centre for Economic Research.
    6. Alain Marciano, 2011. "Ronald Coase, “The Problem of Social Cost” and The Coase Theorem: An anniversary celebration," European Journal of Law and Economics, Springer, vol. 31(1), pages 1-9, February.
    7. Frolov, Daniil, 2019. "From transaction costs to transaction value: Overcoming the Coase-Williamson paradigm," MPRA Paper 95959, University Library of Munich, Germany.
    8. Lo Turco, Alessia & Maggioni, Daniela & Zazzaro, Alberto, 2019. "Financial dependence and growth: The role of input-output linkages," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 308-328.
    9. Kenneth L. Avio, 2004. "A Modest Proposal for Institutional Economics," Journal of Economic Issues, Taylor & Francis Journals, vol. 38(3), pages 715-745, September.
    10. G Ottaviano & Diego Puga, 1997. "Agglomeration in a global Economy: A Survey," CEP Discussion Papers dp0356, Centre for Economic Performance, LSE.
    11. Antonella Nocco, 2009. "Preference Heterogeneity And Economic Geography," Journal of Regional Science, Wiley Blackwell, vol. 49(1), pages 33-56, February.
    12. Antonelli, Cristiano, 2013. "Globalization Localized Technological Change and the Knowledge Economy," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201325, University of Turin.
    13. Amitrajeet A. Batabyal & Hamid Beladi, 2022. "The Response of Creative Class Members to Regions Vying to Attract Them With Subsidies," International Regional Science Review, , vol. 45(5), pages 581-600, September.
    14. Warren Samuels, 2007. "The interrelations between legal and economic processes: a consideration of the reactions," Constitutional Political Economy, Springer, vol. 18(4), pages 243-285, December.
    15. Bård Harstad, 2012. "Buy Coal! A Case for Supply-Side Environmental Policy," Journal of Political Economy, University of Chicago Press, vol. 120(1), pages 77-115.
    16. Gersbach, Hans & Rochet, Jean-Charles, 2017. "Capital regulation and credit fluctuations," Journal of Monetary Economics, Elsevier, vol. 90(C), pages 113-124.
    17. Kevin P. Heanue, 2008. "Measuring Industrial Agglomeration in a Rural Industry: The Case of Irish Furniture Manufacturing," Working Papers 0830, Rural Economy and Development Programme,Teagasc.
    18. Amitrajeet A. Batabyal & Hamid Beladi, 2022. "Commuting to work in cities: Bus, car, or train?," Regional Science Policy & Practice, Wiley Blackwell, vol. 14(3), pages 599-609, June.
    19. Heindl, Peter, 2012. "Transaction costs and tradable permits: Empirical evidence from the EU emissions trading scheme," ZEW Discussion Papers 12-021, ZEW - Leibniz Centre for European Economic Research.
    20. Eduardo Pol & Peter Carroll & Paul Robertson, 2001. "A New Taxonomy of Economic sectors With a View to Policy Implications," Economics Working Papers WP01-01, School of Economics, University of Wollongong, NSW, Australia.

    More about this item

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • A2 - General Economics and Teaching - - Economic Education and Teaching of Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:atlecj:v:31:y:2003:i:2:p:133-145. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.