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AbstractThe Coase theorem, circa the 1970s, had no settled meaning or content; instead, that meaning and content was created – and in differing ways – by the modeling choices of scholars who attempted to grapple with and assess the proposition that Coase had laid out in 1960. These modeling decisions included both the theoretical frameworks laid onto the theorem and the assumptions (including meanings ascribed thereto) said to underlie it. The present article illustrates this using the 1960s and 1970s extortion debate as a backdrop, showing how conclusions reached regarding the theorem's validity hinged on the Coase theorem worlds created by the authors involved.

The Coase theorem states that, in the absence of transaction costs, the assignment of property rights does not affect resource allocation, and the allocation is Pareto optimal. The theorem also implies that the order in which parties settle in a given location does not affect resource allocation either. This article argues that Pareto optimality is not attained in a class of prevalent cases involving uncertain rights, risk aversion, and resource divisibility. Resolution of the uncertainty results in a Pareto improvement for all parties and in a different allocation of resources if wealth effects are significant. Further, the article argues that the order in which parties settle in a given location may affect resource allocation.

SUMMARYThe idea of a single‐owner who owns the opposing interests of a dispute has been suggested in the literature to make the Coase Theorem operational in resolving dispute. This paper points out that the idea implicitly assumes the existence of an overriding authority, e.g., the Courts, to implement the solution. When such an overriding authority does not exist, a different rationale must be employed to make the single‐owner apparatus work. This insight is explored and then applied to help resolve the Taiwan Strait Conflict. Specifically, a 'One China, Two Republics' policy is proposed and its implications illustrated.

ABSTRACTThis paper considers the relevance of the Coase Theorem to the analysis of sports leagues. It is widely believed that there exists an ideal competitive balance between teams in a sporting contest, and that without competitive restraints to redistribute resources championships will be too unbalanced. The paper reviews the empirical evidence on this issue to date, and then examines a model where the outcome may be either too little or too much competitive balance. Empirical evidence from English football suggests that the bias is likely to be in favour of too much competitive balance. The implications for European football in general and the Champions League in particular are then discussed.