Despite the appealing logic of the Coase theorem,private actors often fail to resolve the problems caused by externalities on their own.

Question

Quizplus · Accepted Answer

While the Coase theorem suggests that private actors can negotiate and reach efficient solutions to externalities, in practice this often does not happen. There are various reasons for this, including transaction costs, information asymmetry, and distributional concerns. Therefore, private actors often fail to resolve the problems caused by externalities on their own.

Despite the Appealing Logic of the Coase Theorem,private Actors Often