According to the Coase Theorem, assignment of property rights will permit bargaining that leads to an efficient solution only in the absence of externalities.

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According to the Coase Theorem, efficient solutions can be reached regardless of whether a situation involves externalities, as long as property rights are well-defined and transaction costs are low. However, the presence of externalities may affect the distribution of the gains from trade resulting from the bargaining process.

According to the Coase Theorem, Assignment of Property Rights Will