The major implication of the coase theorem is that individuals can solve many externalities if they can buy and sell the right to generate the externality.
According to the Coase Theorem, where there is a conflict between property rights, the parties involved can bargain or negotiate terms that fully reflect the actual costs and underlying values of the relevant property rights, leading to the most efficient conclusion. The Coase theorem in law and economics describes the economic effectiveness of a financial decision or result in the presence of externalities. According to the Coase Theorem, granting property rights can mitigate harmful externalities in some situations. A Forrester might manage their forest, for instance, to ensure its lifespan and safeguard it from fires. The ability to sell logs in upcoming years is an incentive to do this.
Hence, The major implication of the coase theorem is that individuals can solve many externalities if they can buy and sell the right to generate the externality.
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