I mentioned in a previous post that my latest work-in-progress “Coase’s fable” is a follow-up to two previous papers I wrote, one titled “Coase’s parable”; the other, “Modelling the Coase Theorem.” Now, as a follow-up to my follow-up (!), I am going to address two additional research questions in my fable paper based on some of the feedback I received this past weekend at the University of Austin:

1. A theorem or an “axiom”? It was the Chicago economist George Stigler who credited Ronald Coase with developing a “theorem”: Coase’s insight about costless bargaining. My focus, by contrast, is on the underlying premise of this so-called theorem — specifically, on Coase’s insight that harms are a reciprocal problem. I will therefore explain why we should refer to this novel insight as an axiom.

2. What is the domain or scope of Coase’s axiom? Next, I will explore the domain of Coase’s reciprocal-harm premise. Does the reciprocal-harm model apply only to economics harms (e.g. so-called “spillover effects” generated by individuals and firms); does it apply to involuntary harms more generally (e.g. cases of mere negligence); or does it apply to all harms?

Stay tuned, for I will further address both of these key questions in my next two posts …