Larry David the economist

 I've recently been binge watching Larry David's "Curb Your Enthusiasm". The show follows Larry as he goes through life. Larry has a very particular way of thinking that often causes him to get into verbal altercations; however, Larry is almost always right. He views life economically. If he is wronged he expects an equal "payment" to compensate him for the negative externality that was imposed on him. This payment is not always a money transfer (mt), but I am sure that Larry does the calculations to make sure the utility he gains from any form of payment (ap) would equate to a money transfer so that, MUmt = MUap. Unfortunately for Larry, the tragedy of life is that most people are "irrational" and don't think like his economic brain does. This often fuels the confrontation. 

One day Larry walks into a gym locker room. Gyms and therefore locker rooms are private with a limited membership (excludability and rivalrous). However, the air inside the locker room is public. When Larry walks up to the sink, there is a paunchy man applying a hefty amount of baby powder to his armpits. As he does this, powder explodes into the air contaminating it significantly, covering Larry's glasses. Because the air inside the private area is public, a fair coasian solution to this localized problem would be for the paunchy man to offer some sort of payment to offset the marginal damages that the powder in the air. In this situation, the damage of the powder is a complete loss of vision for Larry and because of this he just turns away and leaves he locker room. In a rare moment of self restraint and non-confrontation, one can only assume that the damage done to Larry was so costly to him that he had no interest in staying around no matter what the cost. If the man offered Larry $1,000 (maybe even $100) he surely would have stayed and endured the powder contaminated air, but in the real world transaction costs are a real issue and the cost to Larry of having to ask this man to either stop or pay him a fee and then bicker and negotiate with the man was too high for Larry this time.