What a perfect illustration of the Coase Theorem from the New York Times of all places:
Patricia Pilz of Caithness Energy, a big company from New York that is helping make this part of Eastern Oregon one of the fastest-growing wind power regions in the country, is making a tempting offer: sign a waiver saying you will not complain about excessive noise from the turning turbines — the whoosh, whoosh, whoosh of the future, advocates say — and she will cut you a check for $5,000.
“Shall we call it hush money?” said one longtime farmer, George Griffith, 84. “It was about as easy as easy money can get.”
What amount of money would make you willing to accept the noise from the turbines? Apparently for some, for $5,000 the price is right.
But not everyone was happy, and some refused to sign:
“The lady that came said everyone else signed,” said Jarrod Ogden, 33, a farmer whose house would be directly opposite several 300-foot turbines once Shepherd’s Flat is completed. “But I know for a fact that some people didn’t. I’m all for windmills, but I’m not going to let them buy me like that. I think they’re just trying to buy cheap insurance.”
Ah the hold-out dilemma. This tells me that $5,000 is too low of a price, and if they want to buy everyone out, they’ll have to increase the price.