Packing Out Your Trash, Brown M&Ms, and $100 Bills on the Sidewalk
The Answer Is Transaction Costs
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The Importance of Transaction Cost in Collective Action
The indifference curves that depict the trade-off between my welfare and your welfare are idiosyncratic, very particular to the setting and to the individual. The role of transaction cost in revealing type and giving costly signals is central to many activities when you think about it. By far the lowest transaction cost way to solve collective action problems is to create incentives for being concerned about the property value or welfare of others.
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