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His second major article, The Problem of Social Cost , argued that if we lived in a world with out transaction prices, individuals would cut price with each other to create the identical allocation of sources, whatever the way a court docket might rule in property disputes. Coase used the instance of a nuisance case named Sturges v Bridgman, the place a noisy sweetmaker and a quiet physician were neighbours and went to court to see who should have to move. Coase mentioned that regardless of whether or not the decide ruled that the sweetmaker had to cease utilizing …

