Which of the following are qualifications of the Coase Theorem?

Question

​Which of the following are qualifications of the Coase Theorem?

Quizplus · Accepted Answer

The Coase Theorem states that if bargaining is costless and property rights are well-defined, then bargaining will lead to an efficient outcome regardless of which party initially holds the property rights. Therefore, technical transaction costs must remain low and be unaffected if liability assignment is reversed (option A), and one party quickly makes an offer the other is just willing to accept only when the information regarding payoffs is complete, certain, and known to both parties (option C) are both qualifications of the Coase Theorem. However, option B (both parties must operate in a purely competitive market) is not a qualification of the Coase Theorem, and therefore, option D (all of the above is correct) is not the correct answer. Hence, the best choice is only A and C, i.e., option E.

​Which of the Following Are Qualifications of the Coase Theorem

Which of the Following Are Qualifications of the Coase Theorem