Which of the following statements about Coasian reasoning is true?
A)Coasian reasoning lacks symmetry, it does not provide a starting point for negotiations toward an efficient outcome.
B)Coasian reasoning emphasizes on the benefits received by the person having more rights compared to the others in the group.
C)Coasian reasoning explains how the costs and benefits of a transaction are distributed among the parties.
D)Coasian reasoning provides a starting point for negotiations toward an efficient outcome, if the cost of negotiation is low.

Question

Quizplus · Accepted Answer

Coasian reasoning provides a starting point for negotiations toward an efficient outcome, if the cost of negotiation is low. This is because Coasian reasoning emphasizes the importance of negotiating property rights and analyzing the costs and benefits of different allocations of those rights, in order to come to an efficient outcome. However, if the cost of negotiation is too high, it may not be feasible to reach an efficient outcome through bargaining.

Which of the Following Statements About Coasian Reasoning Is True