Coasean bargaining, a concept named after economist Ronald Coase, involves private negotiations to resolve issues arising from external effects. Coase pioneered the idea that these private arrangements could be preferable to government intervention, leading to a Pareto-efficient outcome if all mutual gains are realized through the bargaining process.

Coasean Bargaining

Ronald Coase was an economist who pioneered the idea that private bargaining over external effects could be a preferable alternative to government intervention.

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The demonstration that a negotiated payment between fishermen and plantation owners could lead to a mutually beneficial outcome raises the question of whether such private bargaining is a practical and implementable solution for market failures in the real world.

Private Negotiation as a Potential Real-World Remedy for Market Failure

To cite the ebook, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/.

To cite a unit, use The CORE Econ Team 2023 The Economy 2.0: Microeconomics Open access e-text https://core-econ.org/the-economy/ Unit [unit number] (url).

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