Authors:

  • Ian Mackenzie

Excerpt

Coasean Bargaining in the Presence of Pigouvian Taxation. Ian Mackenzie, October 2, 2015. "Coasean arguments against the Pigouvian perspective are well established. A central tenet in this criticism argues that a Pigouvian tax may be a source of inefficiency: if parties were to bargain in the presence of a Pigouvian tax, (allocative) inefficiencies would occur—the so-called Buchanan-Stubblebine-Turvey Theorem. By analyzing a Coasean environment where the appropriation of property rights is costly, we show Coasean bargaining in the presence of a pre-existing (Pigouvian) tax may be superior. This has implications for policy... " Link