Coase Theorem
Etymology
Named by economist George Stigler after Ronald Coase’s 1960 paper “The Problem of Social Cost”; Coase himself never stated it as a formal theorem and later stressed that its zero-transaction-cost world does not exist. He won a Nobel for the underlying work.
noun phrase · /KOHZ THEER-um/
The idea that if property rights are clear and bargaining is costless, private parties can resolve conflicts efficiently on their own, whoever starts with the right.
What it names
A powerful thought experiment for spotting when a dispute needs regulation and when clear ownership plus negotiation would settle it — and, by its unrealistic assumptions, for seeing why transaction costs make markets messy.
Example
By the Coase theorem, the beekeeper and the orchard owner might strike a private deal — until you count the lawyers it would take.
Related idea
It reframes an externality: rather than needing a tax or ban, a well-defined right lets the affected parties bargain the harm away — as long as the cost of bargaining stays low, which it rarely does.