题目内容
If the social value of producing robots is greater than the private value of producing robots, the private market produces too few robots.
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According to the Coase theorem, if private parties can bargain without cost, then the private market will solve the problem of externalities.
Private parties may choose not to solve an externality problem if the transaction costs are large enough.
When externalities are present, reaching an efficient outcome is especially difficult when the number of interested parties is large.
Sophia sits behind Gabriel on an airplane. Gabriel owns the right to recline his seat and values this right at $10. Sophia values a non-reclined seat in front of her at $20. Assuming no transaction costs, an efficient solution would be for Sophia to pay Gabriel $15 to not recline his seat.
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