Hamid and Lee are neighbors. Hamid has a barking dog that he keeps in his backyard for property protection; he values the dog at $600. Lee despises the constant barking, because it costs him $800 in lost sleep.
a. If Hamid has a legal right to own a barking dog, is there a Coase solution to this problem?
b. Because Hamid speaks Farsi and Lee speaks Korean, they need an interpreter to handle negotiations regarding the dog. Is there a Coase solution to this problem if the interpreter costs $70? How about if the interpreter charges $210?

Question

Quizplus · Accepted Answer

The Answer of Hamid and Lee are neighbors. Hamid has a barking dog that he keeps in his backyard for property protection; he values the dog at $600. Lee despises the constant barking, because it costs him $800 in lost sleep.
a. If Hamid has a legal right to own a barking dog, is there a Coase solution to this problem?
b. Because Hamid speaks Farsi and Lee speaks Korean, they need an interpreter to handle negotiations regarding the dog. Is there a Coase solution to this problem if the interpreter costs $70? How about if the interpreter charges $210?

Hamid and Lee Are Neighbors