This story form Marketplace is a great example of externalities and how clearly defined property rights leads to mutually beneficial trades. (The audio is way more fun than the transcript.) Coase would be proud. It also mentions how restrictions on trade affect bargaining positions and market outcomes.
For an example of how markets for air rights may have failed, click here.
The two stories might be fodder for a class discussion about why the market for air rights might be "good" when the two parties are developers or landowners, and "bad" when one party is Central Park.
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