Coase proved that externalities, and by extension, everything, are efficient back in 1960. He won a Nobel Prize for it. It’s the most cited economics paper of all time.
...I’m not sure about this. Google Scholar currently says Coase’s “The Problem of Social Cost” has 21,502 citations, but Kahneman & Tversky’s “Prospect theory: An analysis of decision under risk” apparently has 27,143, and Jensen & Meckling’s “Theory of the firm: Managerial behavior, agency costs and ownership structure” apparently has 38,476.
While I’m here...
...I’m not sure about this. Google Scholar currently says Coase’s “The Problem of Social Cost” has 21,502 citations, but Kahneman & Tversky’s “Prospect theory: An analysis of decision under risk” apparently has 27,143, and Jensen & Meckling’s “Theory of the firm: Managerial behavior, agency costs and ownership structure” apparently has 38,476.