What are some circumstances under which the coase theorem fails to apply?

Circumstance under which the Coase theorem fails;

This theorem is not suited for practical applications because the initial allocation of property rights may affect the final result of the negotiations.

Explanation:

The externality is smaller than the transactions cost associated with negotiating an agreement.

The two parties are unable to communicate.

Explanation:

honesty and integrity.

inspire others.

commitment and passion.

good communicator.

decision-making capabilities.

accountability.

delegation and empowerment.

creativity and innovation.

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