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This topic has appeared in the English Wikipedia rankings 1 time. It first appeared on 2026-07-02 and was most recently seen on 2026-07-02.
"The Problem of Social Cost" (1960) is a law review article by Ronald Coase, then a faculty member at the University of Virginia, dealing with the economic problem of externalities. It draws from a number of English legal cases and statutes to illustrate Coase's belief that legal rules are only justified by reference to a cost–benefit analysis, and that nuisances that are often regarded as being the fault of one party are more symmetric conflicts between the interests of the two parties. If there are sufficiently low costs of doing a transaction, legal rules would be irrelevant to the maximization of production. 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.
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