Asymmetric Information Bargaining Problems with Many Agents.

A yes or no decision must be made about some issue. All agents must agree. The "Coase theorem" asserts that the efficient outcome will always result. Suppose the value (positive or negative) that an individual attaches to an affirmative decision is privately known to that individual. It is proved, under very mild conditions, that with independent types, as the number of agents increases, the probability of an affirmative efficient decision goes to zero. An example in which it is common knowledge that an affirmative decision is efficient and yet the probability of such a decision goes to zero is given. Copyright 1990 by The Review of Economic Studies Limited.