Pat Gunning wrote:
"I wonder if the Coase theorem ever did get diffused. Perhaps it would be
more accurate to say that it was CONfused. The treatment in McConnell and
Brue's principles text, which is the last book I used, seemed almost
ridiculous compared with the message that I believe Coase really 
wanted to send.

Steven Medema wrote:
" ... for a number of reasons, not least of which is that Coase has claimed
in recent years that the whole Coase theorem discussion is far removed from
the main point of his article ..."


In my 2009 book, *Intellectual Paths and Pathologies: How Small Events in
Scholarly Life Accidentally Grow Big*, the printed version of my doctoral
dissertation at Erasmus U., I examined 40 or so articles (including the most
cited and the most recent 20 articles on the "Coase Theorem") and detected
the size of the well-documented confusion about the "Coase Theorem": More
than 75% percent of the articles misinterpreted Coase's 1960 article of "The
Problem of Social Cost". This has not much changed even after Coase was
awarded the Nobel Prize in 1991 and gave a speech on his contribution in
which he clearly stated that he was completely misunderstood: none of the 20
articles after 1991 subscribed to Coase's original version of the "theorem."

Steve Medema wrote:
"There is also the related question of why Coase waited nearly four decades
after the publication of this article to weigh in forcefully on this issue
rather than trying to derail the whole "theorem" debate early on."


1.The main reason for the misunderstanding is George Stigler's 1966 book,
Theory of Price. This is the first textbook in which Coase's 1960
contribution was named for the first time. In fact, Stigler's influence
point was reported by S Medema and D McCloskey early on. What I found out
was the following:  Stigler's influence was so large that considerably many
articles in the economic literature using the "Coase Theorem" did have NO
reference to Coase 1960. They all relied on Stigler's few works on theorem
with "zero transaction costs" assumption. Among those articles was the most
cited article on the "Coase Theorem" in the ISI Web of Knowledge by
Kahneman, Knetsch, and Tversky 1990 "Experimental Tests of the Endowment
Effect and the Coase Theorem" JPE Vol. 98 No. 6.
2.Why is this so? I argued that the main reason for the "Coase Theorem"
remaining uncorrected for about 30 (and even more) years is intellectual
path dependence. Stigler's 1966 (mis-)interpretation started a pathway in
which the entire literature after him was locked in to a  second-best
commentary, i.e. Stigler's (not Coase's) version of the "Coase Theorem."
Even after Coase Nobel Prize speech, the situation did not  get better
because intellectual sunk costs in the "market for ideas" were so high.

For those who are interested in the whole argument: you may download the
book from http://hdl.handle.net/1765/17074 or search it using Google Books
at
http://books.google.com.tr/books?id=ouysERlFWTsC&lpg=PP1&ots=ol5XFegs9v&dq=intellectual%20paths%20and%20pathologies&pg=PP1#v=onepage&q=&f=false


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