A neighbor has started keeping chickens, including a rooster who crows at the break of dawn

Marketing Dec 25, 2020

A neighbor has started keeping chickens, including a rooster who crows at the break of dawn. Other neighbors like to sleep.

a. If there is a law protecting Diana, a neighbor, right to quiet, what can the neighbor do to keep his chickens?

b. Can there be an efficient outcome?

c. Would Diana expect this to happen?

Expert Solution

Here, the neighbor creates a negative externality for Diana.

a. In this case, the neighbor has to pay Diana for the disutility caused. Thus, Diana must get compensation for the noise pollution created by chickens.

b. Yes, the efficient outcome can be achieved.

c. Yes, Diana can expect this to happen only when the property rights are appropriated stated, and executed.

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