If Edna lives next door to a nightclub and the loud music disturbs her sleep, the Coase theorem suggests that an efficient agreement can be reached if

Question

Quizplus · Accepted Answer

The Coase theorem posits that if property rights are well-defined and transaction costs are low, parties can negotiate a mutually beneficial agreement regardless of who holds the property rights. Thus, an efficient agreement can be reached if either party has a well-defined property right.

If Edna Lives Next Door to a Nightclub and the Loud