

At 101 years old, Nobel Laureate Ronald Coase Writes New Book, Edits New Journal - onlawschool
http://www.uchicago.edu/features/20120423_coase/

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PakG1
The most influential university course I ever took was numbered BUEC 495. It
was titled "Economic Analysis of the Law". In particular, it was a fascinating
treatise on the Coase Theorem; perhaps half of the class was spent on
understanding it and its implications.

 _The theorem states that if trade in an externality is possible and there are
no transaction costs, bargaining will lead to an efficient outcome regardless
of the initial allocation of property rights. In practice, obstacles to
bargaining or poorly defined property rights can prevent Coasian bargaining._

<http://en.wikipedia.org/wiki/Coase_theorem>

Especially for our industry, which make systems that deal with data,
information, transactions, etc, I think we have to be especially appreciative
of what the Coase Theorem can imply. At a fundamental level, the technology
our industry develops is all about lowering transaction costs, whether we're
aware of it or not. And that lowering of transaction costs means that the
world does become more efficient at allocating resources, if the Coase Theorem
is true.

Our professor read us a passage from _Knowledge and the Wealth of Nations_ ,
part of which is cited here (edit: only a bit more detailed than the text in
OP, but I still think it's a cool scene worth mentioning):

<http://www.salon.com/2006/11/16/milton_friedman/>

 _That was the night Ronald Coase came to dinner at Aaron Director’s home to
defend his views of transaction costs against a skeptical Chicago department.
Coase had submitted a paper arguing that simply assigning property rights and
then letting market processes take their course was usually a better solution
than costly government regulation. The referees were certain that something
was wrong with his argument. Hence the occasion of the dinner. George Stigler
later recalled, “In the course of two hours of argument the vote went from
twenty against and one for Coase to twenty-one for Coase.” Midway, Milton
Friedman opened fire, and the bullets hit everyone but Coase. “What an
exhilarating event!” wrote Stigler. The guests said good night knowing that
intellectual history had been made._

Honestly, Coase was and is a brilliant guy. My mind looks at the world in a
totally different way due to his work.

edit: And I should note that although Coase refuses to take credit for
developing the Coase Theorem in OP, everyone else gives him the credit. So I
think he's just being modest there.

~~~
grimtrigger
Before one goes to apply the Coase Theorem too broadly, it is important to
note its limitations. The obvious ones are named by Coase himself: liquidity
constraints, poorly defined property rights, and (of course) transaction
costs.

What came about much later is the Endowment Effect: that people value things
they own more highly than than an identical good that they do not own. Thus
initial allocation of property rights matters, even when the common
constraints are satisfied.

<http://en.wikipedia.org/wiki/Endowment_effect>

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antirez
Italian Nobel Rita Levi Montalcini (<http://en.wikipedia.org/wiki/Rita_Levi-
Montalcini>) turned 103 years old a few days ago, and she is pretty active as
well... maybe taking the mind active helps living a lot and well :)

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josephcooney
The nobel prize for economics is more correctly known as the Sveriges Riksbank
Prize in Economic Sciences in Memory of Alfred Nobel, and has not been without
its criticism
[http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economi...](http://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Economic_Sciences#Controversies_and_criticisms)

~~~
nickik
In Economics 100% opposed people can both get nobel prices. Somethimes two
people that oppose each other get it together. Its a Social Sience you cant
prove anything and its really really hard to make a conclusion for the real
world. In Economics people talk about the same issues for hunderts of years,
mostly the diffrents schools just develop there own theorys further.

That all said economics is a wunderful subject, it trains the mind in another
was then for example programming does. Economics can help you understand
things that would otherwise not be possible.

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melling
It's impressive to see people working and productive as they near 100, or even
surpass it. It makes we wonder how much better off we would be if we could
solve a handful of difficult problems so people like Steve Jobs and Randy
Pausch could have survived 2-4 more decades.

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bitwize
I thought John McCarthy working on his ideas for "Elephant" in his eighties
was impressive. This just blows my mind.

That said, why is there an unpausable YouTube video attached to this article?

