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Why did Bulgaria join the Central Powers?
Coase Theorem
The Coase Theorem postulates that if property rights are well-defined and transaction costs are low, parties will negotiate privately to correct externalities and allocate resources efficiently.
Externalities
Externalities are unintended side effects of economic activity affecting third parties not directly involved in the transaction, which can be either positive or negative.
Pollution Permits
Legal rights granted by governments to emit a specific amount of pollutants into the environment.
Corrective Tax
A tax designed to incentivize socially desirable behavior, often used to correct for the negative externalities of an action or consumption.
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