Steven G. Medema has recently published online a working paper entitled “How Textbooks Create Knowledge and Meaning: The Case of the Coase Theorem in Intermediate Microeconomics“.
Abstract: It is now a commonplace to include a discussion of the Coase theorem in one’s intermediate microeconomics textbook, generally in a chapter devoted to externalities or externalities and public goods. But this was not always the case. As the present paper demonstrates, it took nearly two decades after the publication of “The Problem of Social Cost” for the theorem to become even a reasonably a well-established part of the intermediate textbook literature. Its introduction into this literature raises a host of issues for examination: When did the theorem first appear? How was it stated? Are there variations in the statements of the theorem and its attendant assumptions across authors? When did treatment of it become commonplace? How long did it take the authors of textbooks that did not initially include it to bring the theorem into the discussion? What are the backgrounds (e.g., graduate training, faculty affiliations, research fields, etc.) of authors who incorporated the theorem early on? How was the theorem treated? As a surprising result? A useful one? Negatively? What degree of relevance or applicability was ascribed to it? A host of issues and contrasts emerge from the textbook treatments of the theorem, many of which appear to go to problems entailed in presenting a new and controversial idea, one with a number of nuances that were being teased out in the scholarly literature over the same period — nuances that could be helpful or harmful for the presentation of the theorem to a student audience.
Keywords: Coase theorem, textbooks, externalities, microeconomics.
JEL Classification: A22, B2, D00, K00.