The Coase Theorem Game Theory - The Progress Freedom 科斯定理amp；博弈过程amp；自由.ppt

The Coase Theorem Game Theory Presented by Dr. Elizabeth Hoffman Professor of Economics and CU President Emerita Coase Experiment Coase Experiments Payoff Sheet Coase Theorem Ronald Coase British Economist Born December 29, 1910 Won Nobel Memorial Prize in Economics in 1991 The Problem of Social Cost, 1960 Coase Theorem Owner of property right will manage production or negotiate a price such that those not owning property right will pay Assign property rights: To pollute To breath clean air To a fishery To an oil pool Coase Theorem Coase argued outcome would be efficient, only the distribution of resources would be affected. Examples: Farmer and rancher decide how much land to fence for farming and how much to allow as open range for cattle Railroad and farmer will decide how close to the tracks to allow crops to grow and how much burning from sparks to allow Coase Theorem Experimental Tests of the Coase Theorem Property rights by the flip of a coin Large bargaining groups Property rights by earned entitlement and moral authority Coase Theorem Experimental Results Coase Theorem Problems with the Coase Theorem Assignment of property rights can be disputed in the legal system (tort law) Transaction costs may lead to different outcomes depending on which side has property right Imperfect or asymmetric information about valuations Free rider problem comes into effect when more than one person shares property right Pooling can result in last owner holding out to get all the profits Others, not included in bargaining, may be affected by outcome Nash Equilibrium John Nash American Mathematician Born June 13, 1928 Won Nobel Memorial Prize in Economics in 1994 for Game Theory Cournot-Nash Equilibrium Cournot – 19th century economist who first came up with an idea to formalize Adam Smith’s theory of perfect competition Games and Economic Behavior by von Neumann and Morgenstern (1944), first real book in game theory Nash developed a simple way to illustrate points m