Caps on Coasean Transfers

MacKenzie, Ian A. and Ohndorf, Markus (2016) Caps on Coasean Transfers. Oxford Economic Papers, 68 2: 566-584. doi:10.1093/oep/gpv091

Author MacKenzie, Ian A.
Ohndorf, Markus
Title Caps on Coasean Transfers
Journal name Oxford Economic Papers   Check publisher's open access policy
ISSN 0030-7653
Publication date 2016-01-01
Sub-type Article (original research)
DOI 10.1093/oep/gpv091
Open Access Status Not Open Access
Volume 68
Issue 2
Start page 566
End page 584
Total pages 19
Place of publication Oxford, United Kingdom
Publisher Oxford University Press
Language eng
Formatted abstract
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 not Pareto superior, but may increase Kaldor-Hicks efficiency. Our analysis provides additional insights into the establishment/enforcement of property rights, such as indigenous land rights, and highlights when restrictions on transfers are desirable.
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: HERDC Pre-Audit
School of Economics Publications
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Created: Wed, 13 Jan 2016, 02:09:00 EST by Alys Hohnen on behalf of School of Economics