Caps on Coasean Transfers

MacKenzie, Ian A. and Ohndorf, Markus (2013). Caps on Coasean Transfers. 485, School of Economics, University of Queensland.

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Author MacKenzie, Ian A.
Ohndorf, Markus
Title Caps on Coasean Transfers
School, Department or Centre School of Economics
Institution University of Queensland
Open Access Status Other
Report Number 485
Publication date 2013-08-30
Total pages 21
Language eng
Abstract/Summary We investigate the efficiency of Coasean bargaining when transfers between agents are capped. We model a two-stage Coasean environment where, in the first stage, property rights are costly to attribute. After the attribution stage agents voluntarily exchange over the level of harm. If property rights are attributed via an all-pay auction, then the introduction of a cap is Pareto improving. Using a Tullock contest we find a cap is Pareto inferior, but may increase Kaldor-Hicks efficiency. Applications include the analysis of tort law.
Institutional Status UQ
Additional Notes

Document type: Working Paper
Collection: School of Economics Publications
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Created: Tue, 24 Feb 2015, 16:49:09 EST by Alys Hohnen on behalf of School of Economics