00:01
So this question refers to something in economics called the coast theorem, right, which says that private individuals and private markets can come up with solutions to externalities, but these are not going to happen in two cases.
00:13
One, if you've got a whole bunch of people involved.
00:16
And basically, it's because it's way too difficult to get everyone at the negotiating table and hammer out a settlement.
00:22
For some pollution issues, literally billions of people are involved.
00:26
It is wildly impossible for three billion people to sit down at the same negotiating table and make a deal that includes three billion different people in the text of the agreement.
00:38
The other way is that when there are otherwise high costs of negotiating, so back in the days before internet, even if the number of people was sort of small, if they didn't live super close to each other, it might have still been unworkable to make a deal because communications across long distances was very expensive.
00:57
And these people couldn't get in the contact and have the communication required to strike a deal, right? so the answer here is clearly the first one, right? number of parties too large...