The Coase theorem claims that in the case of tobacco

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The Coase theorem posits that under conditions of no transaction costs and well-defined property rights, the allocation of resources will be efficient and invariant to the initial assignment of property rights, as parties will bargain to correct any inefficiencies. This means it doesn't matter who initially holds the rights (smokers or those affected by smoke); what matters is that they can negotiate to reach a mutually beneficial outcome.

The Coase Theorem Claims That in the Case of Tobacco