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V. The Problem Illustrated Anew - Coggle Diagram
V. The Problem Illustrated Anew
4 CASES
Case 1: Sturges v. Bridgman (1879)
The doctor complains about the noise and wins an injunction
Coase’s view: The harm is reciprocal — stopping the confectioner also harms him
With zero transaction costs, they could bargain:
Doctor could pay for noise reduction
Confectioner could pay for tolerance.
Case 2: Cooke v. Forbes (1867)
Court refused an injunction — factory allowed to continue
Coase's view: Identical logic to the cattle vs. crops example
Efficiency test:
If cost of stopping fumes > harm caused → allow fumes.
If harm > production value → bargaining could reduce output.
Case 3: Bryant v. Lefever (1878)
Court found wall-builder not liable
Coase: Both parties jointly cause the nuisance (wall + fire).
Harm is reciprocal, so both must consider external costs
Focus on comparative value of wall vs. smoke damage
Case 4: Bass v. Gregory (1890)
Court upheld the pub’s right to ventilate
Open vent → better beer production (lower cost).
Closed vent → better air for the neighbor.
Coase: Legal doctrine of “lost grant” is irrelevant
Which arrangement maximizes total value, not who owns the right.