The Coase Theorem is a property rights legal and economic theory created by economist Ronald Coase. According to the theory, an optimal choice will be made in complete competitive markets with no transaction costs and an efficient combination of inputs and outputs. This means that the most economically efficient outcome will occur, regardless of who has the initial right to a particular resource.This theory is important because it can help to resolve disputes between people who disagree about how a particular resource should be used. It also helps to explain why certain industries are more regulated than others, as well as how government intervention can sometimes lead to inefficient outcomes. Overall, the Coase theorem provides a valuable framework for thinking about economic efficiency and its implications for society.
