SOSC 2330 Lecture Notes - Lecture 1: Ronald Coase, Perfect Competition, Neoliberalism
29 Nov 2017
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Why would we learn different schools of thought: different perspective: effective (critically consider, know your core value) Key words: externalities= consequences outside exchange relationship (author) coase= harm (what harm is, how we deal with harm) 1950s/1960s important time for economy: school of thought, anti-trust law. Solutions to negative externalities taxation: regulation, property rights eg. farmer john plants corn. Field is by a river that has trout. Beside river is a fishing lodge the pesticide negatively affects the fishing lodge business. Coase theorum (cid:523)a and b through coase theorem"s eyes(cid:524) most efficient way to solve it is to bargain instead of gov. intervention. Transaction cost: cost that comes with resolving a difficulty. Total: general equilibrium theory how can harm effect equilibrium theory. Get rid of transaction rights through property rights (with this specific example) Lots of things can determine our rights legal criteria. Economic problem for harmful effects is how to be efficient.
