Externalities, Extortion, and Efficiency: Reply.

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    • Subject Terms:
      BROMLEY, Daniel W.
    • Abstract:
      The article presents the authors' reply to a commentary by Daniel W. Bromley on their article about extortion, which appeared in the September 1978 issue of "American Economic Review." The authors criticize Bromley's analysis of the possibility of bargaining among Pareto optimal points. They also point out the errors in the compensating variation technique used by Bromley.