The Coase Theorem

According to Ronald Coase, founder of the Coase Theorem; the Coase Theorem is a theory in legal and economics that affirms that when there are complete competitive markets with no transaction costs, an efficient set of inputs and outputs to and from production-optimal distribution is selected regardless of how property rights are divided. In addition to that, according to Investopedia, “the Coase theorem asserts that when property rights are involved, parties naturally follow the most efficient and mutually beneficial outcome”. However, people like Robert C. Ellickson makes the case that the Coase’s famous “Parable” is not plausible and does not conform to reality; which makes us question, is the Coase theorem true or false? To …show more content…
Modernists are able to manage ranchland vegetation by setting controlled burns, spreading herbicides, and dragging chains from tractors to uproot the larger plants; transforming unproductive foothill areas into valuable pasture lands. Setting differences aside, modernists and traditionalists have much in common. Both agree that the life of the cattleman is the best possible in western America and although traditionalists have a much greater stake than modernists do in keeping the Board of Supervisors from closing the range, modernist cattlemen typically join the traditionalists in opposing proposed legal changes that would increase the liabilities of owners of stray …show more content…
In order of seriousness, the four types of countermeasures are (1) self-help retaliation, (2) reports to county authorities, (3) claims for compensation informally submitted without the help of attorneys, and (4) formal legal claims to recover damages. Out of these four, the one that is effective and most used is self-help. Since most trespass disputes are resolved according to extralegal rules, the fundamental enforcement should also be extralegal. A good measured amount of self-help in order to "get even” prompts a predominant and ethically preferred response to someone who has not taken adequate steps to prevent his animals from trespassing. Should self-help fail to work, a person can herd the offending animals to a location extremely inconvenient for their owner or threaten to kill a responsible animal should it ever enter again. While this is considered illegal in some areas, in an unfenced county and even Shasta County, this is considered legal if a warning was already in place or if it was an act of using tougher self-help