The starting point of law and economics movement was marked by publication of Coase's famous paper "the Problem of Social Cost" in late 1960s. In this paper, Coase came up with a theory which is now known as Coase's theorem. In this paper he emphasized on the central role of transaction costs in understating efficiency in the economics. On the one hand, he questioned Pigouvian tradition, and on the other hand, emphasized on the undeniable role of legal rules in achieving efficiency. In this paper we shall first discuss Coase's paper as the foundation of the economic approach to law and then we shall explain the key concepts of this theorem, i.e. transaction costs and externalities. Finally, the paper by giving a different interpretation of Coase's theorem shall reveal the far-reaching effects of public law and private law mechanisms and direct intervention of state in achieving economic efficiency.
Bagheri, M., & Sheikh, J. (2010). IN SEARCH OF OPTIMALITY: AN ANALYSIS OF COASE'S THEOREM ON THE INTERACTION BETWEEN LAW AND ECONOMICS. Law Quarterly, 40(101), -.
MLA
Mahmood Bagheri; Javad Sheikh. "IN SEARCH OF OPTIMALITY: AN ANALYSIS OF COASE'S THEOREM ON THE INTERACTION BETWEEN LAW AND ECONOMICS". Law Quarterly, 40, 101, 2010, -.
HARVARD
Bagheri, M., Sheikh, J. (2010). 'IN SEARCH OF OPTIMALITY: AN ANALYSIS OF COASE'S THEOREM ON THE INTERACTION BETWEEN LAW AND ECONOMICS', Law Quarterly, 40(101), pp. -.
VANCOUVER
Bagheri, M., Sheikh, J. IN SEARCH OF OPTIMALITY: AN ANALYSIS OF COASE'S THEOREM ON THE INTERACTION BETWEEN LAW AND ECONOMICS. Law Quarterly, 2010; 40(101): -.
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