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In a Coasian world firms can negotiate away the transaction costs. How does a firm ensure that this results in an efficient outcome?

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Economic Essay


(i) Brief essay narrative style, arguing the main salient points, apply knowledge and explain real company examples from a current Financial Times article (if you can’t access an article from Financial Times because need subscription login, please give me a message with the URL/article title and I will upload you the article through support). i.e. Explain how Volkswagen (an example) negotiate away transaction costs – in Volkswagen case, how the choices it made ended up in scandal etc. I have attached some articles as well.

(ii) Discuss on the theme of transaction costs and on the more general theme as to the reasons from Coase as to why the firm exists.

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