Prague Economic Papers 2011, 20(4):329-347 | DOI: 10.18267/j.pep.403

Generalized Coase Theorem

Jiří Hlaváček1, Michal Hlaváček2
1 Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague (jihlava@fsv.cuni.cz).
2 Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague and Czech National Bank (michal.hlavacek@cnb.cz).

In this article two original microeconomic models of an externality market are described: (1) model of optimal financial compensation of a damage caused by a negative externality in the economy with agents maximizing probability of their survival (generalized Coase Theorem) and (2) generalized model of optimal financial favour for agents provided a positive externality. Results of the models are compared with the outcomes of the standard microeconomics of subjects maximizing their own profit.

Keywords: negative externalities, marketable permits for exhalations, generalized Coase Theorem, maximizing of the probability of economic survival, positive externalities
JEL classification: D62, D64

Published: January 1, 2011  Show citation

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Hlaváček, J., & Hlaváček, M. (2011). Generalized Coase Theorem. Prague Economic Papers, 20(4), 329-347. doi: 10.18267/j.pep.403
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