The proposition that if bargaining is costless, the market can achieve an efficient outcome is the:
A) Coase theorem.
B) property rights paradigm.
C) market rights theorem.
D) efficient environment paradigm.

Question

Quizplus · Accepted Answer

The Coase theorem states that if transaction costs are negligible and property rights are well-defined, parties can negotiate to reach an efficient allocation of resources regardless of the initial distribution of rights.

The Proposition That If Bargaining Is Costless, the Market Can