coase

Here's Coase himself: The world of zero transaction costs has often been described as a Coasian world.

Surely this is a cases where the Coase theorem could have been of some use.

Hence the huge number of negative results: (a) Coase theorem, (b) the Modigliani-Miller Theorem (irrelevance of capital structure) and (c) Ricardian equivalence.

Ronald Coase won a Nobel Prize in Economics for asking and answering why individuals choose to form companies over contracting out their work.

If anyone is familiar with the economics of Coase (generally credited with devising the spectrum auction scheme), would love to read some good counter-points.

That is literally the exact opposite of what Coase said.

How do we know the Coase theorem applies in this case?

Actually no, as Ronald Coase showed, it doesn't matter who the liability falls on initially - If it falls on the driver, the driver will demand higher wages / fares to compensate for the cost of insuring himself.

The Coase theorem basically says that you can have any initial allocation of resources and so long as they are tradable, transaction costs are low, and a few other conditions are met, you will end up with an economically efficient outcome (i.e.

Like a modern Ronald Coase's "Theory of the Firm." It's got tentacles in a lot of interesting questions.

Still sharp (and cranky about everyone misunderstanding "Coase Theorem" well into his 90s.

For instance, Ronald Coase addressed this issue in an article called "The Problem With Social Cost" > A candy maker had had the same property for over 60 years when a doctor moved next door.

I think this is demonstrated by Coase's "The Problem of Social Cost" [1] > Because in the real world there are costs of bargaining and information gathering, legal rules are justified to the extent of their ability to allocate rights to the most efficient right-bearer.

Coase said that in a world without transaction costs it doesn't matter who the liability falls upon.

Coase's theorem doesn't apply when the parties can't transact with each other to shift the burden.

Sadly Ronald Coase' theory of the firm gets us here.