In 1990 Kahneman, Knetch, and Thaler undermined the behavioral basis for this idea by demonstrating the "endowment effect."
In 1990 Kahneman, Knetch, and Thaler undermined the behavioral basis for this idea by demonstrating the "endowment effect." In the original paper on it, the author analyzed a section of Halsbury's Laws of England to show how it improved on earlier schemes. In previous solutions, parties would need to internalize their externalities through tax or subsidy, an idea associated with Pigou. Named by George Stigler, it reimagines negotiating parties as a single agent able to bargain optimally. First described in the 1960 paper "The Problem of Social Cost," FTP, identify this theorem which states that, absent transaction costs, any government allocation of property rights is efficient, named after the 1991 winner of the Nobel Prize in Economics.
In 1990 Kahneman, Knetch, and Thaler undermined the behavioral basis for this idea by demonstrating the "endowment effect."
Coase Theorem