Given that I have moved myself about as far as possible from home for my college career, I spend a fair amount of time on planes. My most recent trip back to Charlottesville included a 17.5 hour flight, one in which I decided to enter the seating lottery (read: forgot to select a seat at all) and lost spectacularly with an assigned middle seat. I hoped that my seat neighbors would follow "middle seat etiquette", but as we settled in for the journey it was clear that they were both set on commandeering the armrests.
Their use of the armrests imposed a negative externality on me, one that was not accounted for in the price of their tickets (since this airline doesn't charge for selecting a seat). Before I had even learned of Ronald Coase's approach to these kinds of social costs, my intuition told me to engage in private bargaining. However, I faced an assignment problem in determining property rights to the armrest – the airline never made any official decree on the matter, and while I feel very strongly about middle seat etiquette I recognized that using it as an argument in this negotiation would be flimsy at best. I also had to consider the transaction costs of added tension between us and the potential of them cutting off my access to the bathroom in retaliation, a particularly dire prospect for a flight this long. So I decided to cut my losses, take a Panadol, put my headphones in, and watch as many movies as I could.
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