Ronald Coase argued that when there were transaction costs sometimes these external effects can be quite troublesome. So apparently they weren't reading Chung. It's a beautiful example it's very similar to the lighthouse story we talked about in the recent podcast episode with Don Butro about Coase's work saying well let's see how light houses actually work.
Wally Thurman of North Carolina State University and PERC talks with EconTalk host Russ Roberts about the world of bees, beekeepers, and the market for pollination. Thurman describes how farmers hire beekeepers to pollinate their crops and how that market keeps improving crop yields and producing honey. Thurman then discusses how beekeepers have responded to Colony Collapse Disorder--a not fully understood phenomenon where colonies disband, dramatically reducing the number of bees. The discussion closes with the history of bee pollination as an example of a reciprocal externality and how Coase's insight helps understand how the pollination market works.