<P> Guido Calabresi in his book The Costs of Accidents (1970) argues that it is still efficient to hold companies liable that produce greater wealth . </P> <P> In the real world, where people cannot negotiate costlessly, there may be collective action problems of those who caused a nuisance, for instance by smoke emissions from a factory to many neighbouring farms, and so getting together to negotiate effectively can be difficult against a single polluter because of coordination problems . If it is efficient for the farmers to pay the factory to reduce its emissions, some of those farmers may hold off paying their fair share, hoping to get a free ride . The factory may be in a better position to know what measures to take to reduce harm, and can be the cheapest avoider, illustrating Coase's argument . </P> <P> Coase uses three main examples in his article to attempt to illustrate his points . The first is a fictional cattle herder and a farmer, but the second is the case Sturges v Bridgman and the third is the Railway (Fires) Act 1905 . Apart from these main examples, the following cases are referred to . </P> <Ul> <Li> Fontainebleu Hotel Corp. v. Forty - Five Twenty - Five, Inc., 114 So . 2d 357 (1959) </Li> <Li> Cooke v Forbes (1867--1868) LR 5 Eq 166 </Li> <Li> Bryant v Lefever (1878--1879) 4 CPD 172, Bramwell LJ and Cotton LJ </Li> <Li> Bass v Gregory (1890) 25 QBD 481 </Li> <Li> Attorney General v Doughty (1752) 28 ER 290 </Li> <Li> Versailles Borough v. McKeesport Coal & Coke Co. (1935) 83 Pitts . Leg. J 379, 385 </Li> <Li> Webb v Bird (1863) 143 ER 332 </Li> <Li> Rushmer v Polsue and Alfieri, Ltd (1906) 1 Ch 234 </Li> <Li> Adams v Ursell (1913) 1 Ch 269, regarding fish and chips </Li> <Li> Andreae v Selfridge and Company Ltd (1938) 1 Ch 1 </Li> <Li> Delta Air Corporation v. Kersey (1942) 193 Ga . 862 </Li> <Li> Thrasher v. City of Atlanta (1934) 178 Ga . 514 </Li> <Li> Georgia Railroad and Banking Co. v. Maddox (1902) 116 Ga . 64 </Li> <Li> Smith v. New England Aircraft Co. (1930) 270 Mass . 511 </Li> <Li> Vaughan v Taff Vale Railway Co. (1858) 3 H and N 743 </Li> <Li> Boulston v Hardy (1597) 77 ER 216 </Li> <Li> Stearn v Prentice Bros Ltd (1919) 1 KB 395 </Li> <Li> Bland v Yates (1913--1914) 58 Sol J 612 </Li> </Ul>

The problem of social cost ronald coase summary