EconExperiments - Externality

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Concepts & Keywords Illustrated:
		Property rights
		Externalities
		Coase Theorem
Brief description:
		This is a case to show students the existence of property right and how to apply Coase Theorem in real world.
		Pair students up. One of them is a BarBQer who likes and wants to have barbecue; the other one is the neighbor who thinks barbecue produces too much smoke. Base on their different payoffs, they need to negotiate and compromise on the smoke level.
		Half of the BarBQers live in where they are entitled to be compensated for smoke below a certain level; half of the neighbor live in where they are entitled to be compensated for any smoke level over zero.

Teaching Materials: