Archives for Coase theorem



Modesty Glasses

Men in the ultra-Orthodox religious community in Jerusalem object to women walking on the street in short skirts or sleeveless blouses, even attacking those who venture out in such unacceptable outfits.  Very few women will dare to go out dressed that way in certain sections of this magnificent city.  News of the Weird reports a solution that shifts the cost of enforcing the policy to the men: Members of “modesty patrols” are now selling ultra-Orthodox men glasses that blur distant images, thus preventing them from seeing “immodestly dressed” women.  This is a neat application of the Coase Theorem, and it seems a fair one: With these glasses, the costs of enforcing the men’s religious beliefs will be borne by the men rather than by women who choose how they wish to dress.



A Coasean Sign

Last fall, I spoke at an SPSS conference in Las Vegas. As I was heading home, I saw a sign on a convenience store (right next to Bally’s) that made me do a double-take. I got so interested that after a couple of blocks, I convinced my driver to turn around and let me go […] Read More »



The Coase Theorem Rules at NYU Law

The most fundamental principle in the field of law and economics is the Coase Theorem, initially put forth by my friend and former colleague Ronald Coase, who is still intellectually active in his nineties. The Coase Theorem says that — absent large transaction costs — resources will end up being efficiently allocated, regardless of who […] Read More »



Use Gmail, Buy a Car?

Remember our contest on the Coase Theorem? It asked for good examples of the Coase Theorem failing in regard to URLs — i.e., instances in which a company that is most motivated to own a URL for some reason doesn’t. The winner of the contest proposed Nissan.com, which belongs not to the car company, but […] Read More »



The Internet’s Greatest Coase Theorem Violation: Nissan.com

I recently blogged about how well the Coase Theorem does online. It predicts that, regardless of who is assigned property rights, the interested parties will strike a bargain to put the asset in the hands of the party that values it the most. Thus, despite the fact that more or less anyone can purchase a […] Read More »



A Freakonomics Contest: The Coase Theorem Online

Freakonomics schwag is up for offer at the end of this post. As such, it may actually be worth slogging through the brief economics lesson that follows. The Coase Theorem is a somewhat rare species of beast: an economic theory that is both completely counterintuitive and yet often right in practice. The idea is named […] Read More »