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In a recent article, Ian Ayres and Eric Talley revisit the question of the relative superiority of property versus liability rules,' a topic that was introduced to legal academia in its economically oriented form by Calabresi and Melamed two decades ago.2 Ayres and Talley focus on the context in which bargaining is feasible, such as when one neighbor disturbs another (in contrast to situations in which bargaining is infeasible, such as when industrial pollution harms many disorganized victims). In this case, the Coase Theorem3 informs us that when bargaining functions perfectly, the efficient result will be achieved regardless of the legal rule. When bargaining is imperfect due to the possibility of strategic behavior, however, it is understood that the efficient result might not be reached under either property or liability rules.4 The primary argument advanced in Ayres and Talley's article is that, when bargaining is imperfect, "liability rules possess an 'information-forcing' quality" that "may induce both more contracting and more efficient contracting

Do Liability Rules Facilitate Bargaining? A Reply to Ayres and Talley