The Genius Logic of the Coase Theorem

We dive into one of the most cited and revolutionary papers in the history of law and economics: "The Problem of Social Cost" by R.H. Coase.

0:00 The "Common Sense" Error
3:00 Who REALLY Caused the Harm?
5:01 Case 1: The Confectioner and the Doctor
8:00 Math vs. Melodrama
9:10 Case 2: Cattle and Crops
13:14 The Secret World of Zero Transaction Costs
15:00 The “Super Firm”
17:45 Why Regulations Often Fail and Governments are Expensive
19:10 The New Approach to Welfare Economics
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In this video, you’ll discover:
*The Reciprocal Trap*: Why stopping a factory from harming a neighbor actually inflicts harm on the factory—and why the real question is how to avoid the "more serious harm"
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*The Coase Theorem Explained*: How, in a world without "transaction costs," the same optimal result is achieved regardless of who the law says is at fault
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*The "Polluter Pays" Myth*: Why taxing a business for the damage it causes can sometimes lead to less efficient outcomes than doing nothing at all
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*Real-World Chaos*: From straying cattle and destroyed crops to a 19th-century doctor suing a noisy confectioner, we look at the bizarre legal cases that Coase used to prove his point
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*The Secret Ingredient*: Transaction Costs While many textbooks focus on the "ideal world," Coase’s true genius was pointing out that in the real world, transaction costs—the cost of negotiating, drawing up contracts, and inspecting results—are what actually determine how our society functions
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Reference: R. H. Coase, "The Problem of Social Cost," The Journal of Law & Economics, Vol. III (October 1960).
#Economics #LawAndEconomics #CoaseTheorem #PublicPolicy #Philosophy #SocialCost #MarketEfficiency

Видео The Genius Logic of the Coase Theorem канала Against Illusion