The '''Coase theorem''' states that if property rights are well-defined and [[transaction costs]] (including costs of negotiating) are zero or negligible, then the most efficient economic activity will occur regardless of who initially owns the property rights. Negotiation and market transactions will ensure optimal allocation of property. Simply put, '''''it means "build a better mousetrap, and the world will beat a path to your door,"'''''<ref>The phrase is attributed to [[Ralph Waldo Emerson]], who said something similar.</ref> '''''no matter who or where you are'''''. | The '''Coase theorem''' states that if property rights are well-defined and [[transaction costs]] (including costs of negotiating) are zero or negligible, then the most efficient economic activity will occur regardless of who initially owns the property rights. Negotiation and market transactions will ensure optimal allocation of property. Simply put, '''''it means "build a better mousetrap, and the world will beat a path to your door,"'''''<ref>The phrase is attributed to [[Ralph Waldo Emerson]], who said something similar.</ref> '''''no matter who or where you are'''''. |