Economics Dictionary of ArgumentsHome
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| Information, information theory: A character or a character combination contains information when it is clear to the recipient that this character or the character combination appears instead of another possible character or a possible character combination. The supply of possible characters determines to a part the probability of the occurrence of a character from this supply. In addition, the expected probability of the appearance of a character can be increased by already experienced experiences of regularities. The amount of information transmitted by a character depends on the improbability of the occurrence of the character._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Ronald Coase on Information - Dictionary of Arguments
Kiesling I 24 Information/court proceddings/Coase/Kiesling: Courts have an information problem, though: they may not possess all of the knowledge they need to be able to identify which party can avoid the harm at least cost, which is one reason why transaction costs influence outcomes. >Transaction costs/Coase, >Social cost/Coase, >Law/Coase. Low transaction costs: In a low transaction cost setting, parties can bargain to exchange rights to rearrange them if the court’s assignment doesn’t reflect the best feasible assignment of rights and liabilities (“contracting around the law” in Coase’s words). High transaction cost: When courts assign rights and liabilities in the presence of positive (and high enough) transaction costs, though, that assignment could prevent parties from reaching the efficient outcome because transaction costs prevent the parties from bargaining to exchange those rights and liabilities (Pennington, 2015(1): 97). In the farmer-railroad scenario, if the court assigned the right to emit sparks to the railroad and the cost of sparks to farmers was higher than their benefit to the railroad, then the efficient outcome would be for the farmers to pay the railroad to reduce their sparks. But the high transaction costs of organizing farmers to discover how high their cost is and to bargain with the railroad could prevent the transfer of rights to resolve the conflict. Cf. >Externalities/Pigou, >Coase Theorem/Stigler, >Law and economics. 1. Pennington, Mark (2015). Coase on Property Rights and the Political Economy of Environmental Protection. In Cento G. Veljanovski (ed.), Forever Contemporary: The Economics of Ronald Coase. Institute of Economic Affairs._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Coase, Ronald Kiesling I L. Lynne Kiesling The Essential Ronald Coase Vancouver: Fraser Institute. 2021 |
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