The Digital Coase Theorem and the News
The rise of news aggregator apps has spurred legislative initiatives across the globe due to the lawmakers’ ability to represent the interest of local trade associations – namely, traditional news publishers. To a perceived problem, the traditional approach has consistently been to identify the negative externalities created by news aggregator apps at the expense of traditional news publishers. The traditional approach nevertheless lies upon numerous pitfalls and a partial analysis of the situation, hence favoring inefficient outcomes.
But Aurelien Portuese in Competition Policy International offers an alternative approach. Applying the Coase Theorem to the digital journalism problem identified, this article proposes a “Digital Coase Theorem” where an efficient outcome is reached and where innovation is optimally incentivized.