Rational people trade by way of bilateral contracts on open markets until the prices of transactions mean that using firms to provide things is more cost-effective. His second major article, The Problem of Social Cost , argued that if we lived in a world without transaction prices, folks would bargain with one another to create the identical allocation of assets, regardless of the means a court may rule in property disputes. Coase used the instance of a nuisance case named Sturges v Bridgman, where a loud sweetmaker and a quiet doctor were neighbours and went to court docket to see …