The Error of the Coase Theorem: Of Judges Hand and Posner and Carroll Towing

Essay by Daniel Q. Posin

This Essay shows that the Coase Theorem, the fundamental proposition of the law and economics movement, and the proposition for which Professor Ronald Coase won the 1991 Nobel Prize in Economics, does not always hold. Since it does not always hold, it is not a true theorem. Therefore, the vast array of legal-economic scholarship and policy recommendations based upon the Coase Theorem promulgated over the last thirty-five years is not soundly based.


About the Author

Daniel Q. Posin. Professor of Law, Tulane University School of Law.

Citation

74 Tul. L. Rev. 629 (1999)