# Contested concept: coase theorem

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- **Contestedness**: semantic
- **Diagnosis**: Critics and defenders often talk past each other. Empirical refutations attack the efficiency or invariance versions, while Coase himself intended a warning about costs. The reading of the theorem determines whether 'inapplicability' is a criticism or the point.
- **Canonical**: `/concept/coase theorem` (data: `/concept/coase theorem.json`)

## Senses in use
- **A lesson that transaction costs cannot be neglected, so the initial allocation matters and institutions must be compared. The theorem itself concerns only the zero-cost case.** — used in 5 claim(s)
- **Efficiency/invariance: with low transaction costs, bargaining yields an efficient outcome regardless of the initial allocation.** — used in 4 claim(s)
- **Equivalence: contracts, markets and taxes are equally capable of internalizing an externality, given bilateral spillovers and equivalent rights.** — used in 4 claim(s)
- **A comprehensive state-owned macroeconomic framework in which the state manages the nation as a single firm.** — used in 3 claim(s)

## Claims using this term
- [Because transaction costs could not be neglected, the initial allocation of property rights often mattered.](/claim/claim_2158e5d77c7c.md) _(sense: A lesson that transaction costs cannot be neglected, so the initial allocation matters and institutions must be compared. The theorem itself concerns only the zero-cost case.)_
- [In [the comprehensive state-owned macroeconomic framework that Coase envisioned in "The Problem of Social Cost"], the state controls all fa…](/claim/claim_52da4d0951af.md) _(sense: A comprehensive state-owned macroeconomic framework in which the state manages the nation as a single firm.)_
- [[In the efficiency version of the Coase theorem,] the zero transaction cost condition is taken to mean that there are no impediments to bar…](/claim/claim_60c20699dadc.md) _(sense: Efficiency/invariance: with low transaction costs, bargaining yields an efficient outcome regardless of the initial allocation.)_
- [[The problem that transactions are costly] is not a criticism of the Coase theorem itself, since the theorem considers only those situation…](/claim/claim_777c10c69d17.md) _(sense: A lesson that transaction costs cannot be neglected, so the initial allocation matters and institutions must be compared. The theorem itself concerns only the zero-cost case.)_
- [[The Coase theorem] states that if the provision of a good or service results in an externality and trade in that good or service is possib…](/claim/claim_7b1d4a8e31a4.md) _(sense: Efficiency/invariance: with low transaction costs, bargaining yields an efficient outcome regardless of the initial allocation.)_
- [Ronald Coase's main point was that transaction costs, however, could not be neglected.](/claim/claim_7f37fe9e36d9.md) _(sense: A lesson that transaction costs cannot be neglected, so the initial allocation matters and institutions must be compared. The theorem itself concerns only the zero-cost case.)_
- [[In the Coase theorem], aside from transaction costs, all institutional forms are capable of achieving the same efficient allocation.](/claim/claim_826b496b2cf1.md) _(sense: Equivalence: contracts, markets and taxes are equally capable of internalizing an externality, given bilateral spillovers and equivalent rights.)_
- [[The state-owned model in which the state controls all factors of production and private property is abolished] allows the nation to be man…](/claim/claim_8e55d231b448.md) _(sense: A comprehensive state-owned macroeconomic framework in which the state manages the nation as a single firm.)_
- [[Ronald Coase's point was that] because transaction costs are never zero, it cannot be assumed that any institutional arrangement will nece…](/claim/claim_9c1ca713c2d1.md) _(sense: A lesson that transaction costs cannot be neglected, so the initial allocation matters and institutions must be compared. The theorem itself concerns only the zero-cost case.)_
- [Contracts, extended markets, and corrective taxation are equally capable of internalizing an externality.](/claim/claim_aa3cb03eb17c.md) _(sense: Equivalence: contracts, markets and taxes are equally capable of internalizing an externality, given bilateral spillovers and equivalent rights.)_
- [To be logically correct, [the equivalence version of the Coase theorem needs the restrictive assumption that] spillover effects must be bil…](/claim/claim_ad25e4673861.md) _(sense: Equivalence: contracts, markets and taxes are equally capable of internalizing an externality, given bilateral spillovers and equivalent rights.)_
- [The counterintuitive insight that the initial imposition of legal entitlement is irrelevant because the parties will eventually reach the s…](/claim/claim_bbacc935e2f1.md) _(sense: Efficiency/invariance: with low transaction costs, bargaining yields an efficient outcome regardless of the initial allocation.)_
- [[When transaction costs are minimized or nonexistent,] parties will bargain toward an economically efficient solution regardless of the leg…](/claim/claim_d004fbca86b8.md) _(sense: Efficiency/invariance: with low transaction costs, bargaining yields an efficient outcome regardless of the initial allocation.)_
- [What Coase actually argued is that it is important to always compare alternative institutional arrangements to see which would come closest…](/claim/claim_ed76f5880c72.md) _(sense: A lesson that transaction costs cannot be neglected, so the initial allocation matters and institutions must be compared. The theorem itself concerns only the zero-cost case.)_
- [In "The Problem of Social Cost", Coase actually envisioned a comprehensive state-owned macroeconomic framework.](/claim/claim_f8f74857afd1.md) _(sense: A comprehensive state-owned macroeconomic framework in which the state manages the nation as a single firm.)_
- [Equivalence [of institutions in internalizing an externality] also requires that each institution has equivalent property rights.](/claim/claim_fb47301bba1c.md) _(sense: Equivalence: contracts, markets and taxes are equally capable of internalizing an externality, given bilateral spillovers and equivalent rights.)_