Coasean approach

a. Empirical, case-based approach defended by Ronald H. Coase (1910-2013), who was awarded the 1991 the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel (the "Nobel Prize" of economics). In opposition to mainstream economics, which he considered too "abstract", Coase aimed at building economic theory out of empirical case studies. They must, first, found realistic assumptions – in opposition to Friedman's (1953) manifesto. Second, they must be used in the design of policies: they allow the analysis of the specific initial circumstances and a comparison of alternative actual institutional arrangements. b. Bilateral exchange of environmental rights (to pollute or to be protected from pollution) that would reach optimality even in the absence of competitive markets. This approach is named after the Coase theorem, and is supposed to base, for example, the efficiency of payments for environmental services. c. In Coase's spirit (Coase, 1960), refers to the necessity of introducing positive transaction costs in the analysis, which may impede the mutually advantageous exchanges referred to in b and make other solutions more desirable. More largely, refers to policy design by comparison of institutional arrangements rather than by reference to the ideal world of perfect competition.