Changes

The Coase theorem states that if property rights are well-defined and [[transaction costs]] (costs of negotiating) are zero, then the most efficient or [[Pareto optimal]] economic activity will occur regardless of who owns the property rights.  It does not matter who owns the property rights because negotiation will and market transactions will ensure optimal allocation of property.

The '''Coase theorem''' states that if property rights are well-defined and [[transaction costs]] (costs of negotiating) are zero, then the most efficient or [[Pareto optimal]] economic activity will occur regardless of who owns the property rights.  It does not matter who owns the property rights because negotiation will and market transactions will ensure optimal allocation of property.

This simple theorem, first announced in a 1960 paper <ref>Ronald H. Coase, “The Problem of Social Cost,” 3 J. Law & Econ. 1 (1960)</ref> by [[Ronald Coase]] that won the Nobel Prize for Economics in 1991, has powerful implications for economics, law and even philosophy.  It is a conservative theorem and thus most schools and professors downplay or distort it.  Coase himself was vilified for years by liberals for it.

This simple theorem, first announced in a 1960 paper <ref>Ronald H. Coase, “The Problem of Social Cost,” 3 J. Law & Econ. 1 (1960)</ref> by [[Ronald Coase]] that won the Nobel Prize for Economics in 1991, has powerful implications for economics, law and even philosophy.  It is a conservative theorem and thus most schools and professors downplay or distort it.  Coase himself was vilified for years by liberals for it.