According to the Coase theorem, if transaction costs are low and parties are willing to bargain, what can occur?

The Coase theorem posits that if transaction costs are low and parties are able to negotiate, they can reach an efficient outcome through bargaining, regardless of who holds the initial property rights. This suggests that the allocation of resources can be optimized through negotiation between parties.

When transaction costs are negligible, individuals can freely negotiate without significant barriers; thus, the parties involved will arrive at an agreement that maximizes their combined welfare. The outcome is efficient because both parties can negotiate terms that consider their respective interests, leading to a resolution that reflects the highest total value for both. This process establishes that the initial assignment of property rights does not affect the efficiency of the outcome, since the parties can eventually agree on how to best utilize their resources through negotiation.

In this context, the other choices do not align with the key principles of the Coase theorem. The idea is fundamentally about how private negotiation can lead to optimal resource allocation without the need for external intervention or significant transaction costs.