Instead of command and control, a reverse auction or a Coasian solution would provide better ways to manage overbooked flights and bumped passengers.…
Solving the Airplane Seat Problem
According to Ronald Coase, if reclining in an airline seat creates a negative externality, both parties can negotiate because the transaction costs are low.…
Economic Thinkers: The Coase Theorem and Prince
Assume for moment that you are in a college dormitory. You have a final exam tomorrow and someone in a nearby room is playing very loud music. Most of us would say that the music maker has to stop. No…