your roommate has the right to play her harmonica during the day. but you find the best time to study is during the day, and the harmonica playing makes it hard for you to concentrate. you tell your roommate that you will do her laundry every week if she does not play the harmonica during the day and she agrees to this. this is an example of .

Respuesta :

The above persuasion of the roommate by me for not playing harmonium during the day is called the Coase theorem.

What is the Coase Theorem?

The Coase theorem in law and economics describes the economic effectiveness of a financial decision or results in the existence of externalities.

According to the Coase Theorem, when there is a conflict between property rights, the parties involved can bargain and negotiate terms that fully reflect the actual costs as well as underlying factors of the relevant property rights, leading to the most efficient conclusion.

The Coase theorem has been utilized by jurists including legal scholars to analyze and settle legal issues. It is regarded as a key foundation for the majority of contemporary economic studies of governmental regulation, particularly in the context of externalities.

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