Suppose two neighbors share a park.One neighbor,Al,leaves trash in the park.This bothers the other neighbor,Bert.According to Coase's theorem,the optimal level of trash in the park can be achieved if

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Coase's theorem requires clearly defined property rights in order to achieve an optimal level of externalities. In this case, someone needs to have property rights to the park in order to determine who has the responsibility for maintaining it, and who has the right to use it. Once property rights are established, the two neighbors can negotiate to find a mutually agreeable solution to the trash problem.

Suppose Two Neighbors Share a Park