An Interpretation of Ronald Coase's Analytical Approach (1) (Essay‪)‬

Rather, he [Coase] offers a new approach, a new angle, from which economic phenomena can be seen in a different light'. (Cheung 1992, p. 55) Abstract: Coase has made important contributions to economics and has been recognised as one of the most important economists of the twentieth century, but the recognition has mainly focused on the subject matter and much less attention has been given to his analytical approach. In this paper, an attempt is made to identify a distinctive, simple, and straightforward analytical approach that is implicit in his major works. Specifically, it is argued that in both of his famous 1937 and 1960 papers, as well as in some of his other important works, a reasoning procedure of setting a benchmark first and then using the benchmark as the reference point for analysis can be identified. The uniqueness of Coase's benchmark approach is specified and the implications are derived.