Beyond the Dark Clouds: Pigou and Coase on Social Cost

Aslanbeigui, Nahid; Medema, Steven G.

doi:10.1215/00182702-30-4-601

Cited by 61 publications

(13 citation statements)

References 16 publications

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“…Along with all these issues, the key problem of the article as defined by Coase -his argument with Pigou about the proper treatment of externalities -has been the subject of the studies of Baumol (1972), Yandle (1997), Demsetz (1996Demsetz ( , 2011, Aslanbeigui and Medema (1998), Webster (1998) and Hovenkamp (2009), as well as many other researchers. Some have argued that Coase overstates the opposition between his method and that of Pigou.…”

Section: Introductionmentioning

confidence: 99%

Coasean versus Pigovian solutions to the problem of social cost: the role of common entitlements

Slaev

2017

International Journal of the Commons

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This paper works towards drawing a proper relationship between the Coasean and Pigovian approaches that should be based on the distinction between individual/private and shared/common entitlements. Because of the specific goals of his work, Coase (1960) does not make an explicit distinction between the two types of property rights; however, there are basic differences in their management, so this distinction is essential. According to Coase, the definition of property rights facilitates the optimal allocation of private entitlements through Coasean bargaining and market transactions. This paper suggests that shared/common entitlements should also be taken into account. The shared/common entitlements alternative is so important that it should be explicitly outlined in Coase's entitlement optimisation assumption. When resources are shared among members of groups and communities, Coasean bargaining and market deals may be carried out only after co-owners organize and collective management is established in order to negotiate the reallocation of entitlements. For Coasean bargaining to take place in these situations, centralized (i.e. Pigovian) rules and regulations should first be adopted by the groups/communities. Hence, in cases of common property rights, the Coasean and Pigovian approaches are complementary to one another. In such cases, Coasean bargaining is not a rejection of centralized Pigovian regulation but is a means to its improvement. And vice versa: relevant Pigovian rules adopted by the co-owners of entitlements are necessary institutional arrangements enabling Coasean market solutions.

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Section: Introductionmentioning

confidence: 99%

Coasean versus Pigovian solutions to the problem of social cost: the role of common entitlements

Slaev

2017

International Journal of the Commons

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“…While most economists feel at ease to identify the boundaries of the discourse on social costs with the views of Pigou and Coase (see, for example, Aslanbeigui and Medema ), the distinct institutional argument developed by John Maurice Clark and Karl William Kapp has been largely eclipsed from the discourse (for efforts to revitalize this argument, see Berger ; Elsner, Frigato, and Ramazzotti ; Berger and Steppacher ; Gerber and Steppacher ). Therefore, this article has two main aims.…”

Section: Introductionmentioning

confidence: 99%

The Making of the Institutional Theory of Social Costs: Discovering the K. W. Kapp and J. M. Clark Correspondence

Berger¹

2013

American J Econ Sociol

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“…It excludes consumption externalities and in particular, as noted by a referee, demand externalities that Pigou (1932, p. 226 and 808) conceives: my demand for a good may be influenced by the total demand or production of this good, as a consequence of my desire for distinction or imitation.20 On the relevance of this criticism, seeAslanbeigui and Medema (1998, pp. 613-614).21 Coase has often criticised the traditional analysis of market failures that automatically calls for public intervention: see, for example, his articles on marginal cost pricing(1946) or lighthouses(1974).22 MainlyGoldberg (1981), De Serpa (1993),Simpson (1996aSimpson ( , 1996b,Demsetz (1996),Aslanbeigui and Medema (1998) andHovenkamp (2009).…”

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confidence: 99%

“…71-73) develops the argument, but seeCoase's (1996) answer. For a more complete comparison between Coase's and Pigou's visions of the goal and efficiency of public intervention, seeAslanbeigui and Medema (1998).33 The members of these commissions could be chosen according to their expertise in the industry and for long periods; the area could be adjusted; and the terms of their contracts could free them from electoral pressures (Pigou, 1932, pp. 334-335).…”

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confidence: 99%

The three roles of the ‘Coase theorem’ in Coase's works

Bertrand¹

2010

The European Journal of the History of Economic Thought

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This article aims at understanding Coase's apparently paradoxical attitude towards his eponym 'theorem'. On the one hand, he judges as excessive the attention devoted to an assertion that makes the assumption of zero transaction costs. On the other, he has never stopped reasserting its largely questioned validity. We explain this puzzle by identifying three roles of the 'Coase theorem' in his works: heuristic (to bring to light the role of transaction costs), critical (of the Pigovian tradition), and normative (Coase derives policy prescriptions).

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Beyond the Dark Clouds: Pigou and Coase on Social Cost

Cited by 61 publications

References 16 publications

Coasean versus Pigovian solutions to the problem of social cost: the role of common entitlements

Coasean versus Pigovian solutions to the problem of social cost: the role of common entitlements

The Making of the Institutional Theory of Social Costs: Discovering the K. W. Kapp and J. M. Clark Correspondence

The three roles of the ‘Coase theorem’ in Coase's works

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