The Coase Theorem and College Cat Ownership

Recently my roommate Tony got a cat under unusual circumstances. While staying at his girlfriend's duplex they were forced to listen to a cat trapped on the third story balcony crying for multiple days. The cries became increasingly pathetic over the weekend and in an act of desperation the cat finally jumped from the balcony. Like Agent Jack Bower of It's Always Sunny in Philadephia, he came out of the ordeal unharmed.  Tony and his girlfriend took the cat in and contacted the owner whose response to their berating him for mistreating the animal was, "uhhh just like, keep it for yourself then...bitch."

So they did.

A similar thing happened to my friend Allison recently. A cat mysteriously appeared in her house one day. Being casual pet lovers, they let the cat stay for over a week, not sure where it came from. One day someone showed up at their house and asked, "Hey uhhh, that's my roommates cat or something. Has he been hanging out here or whatever?" "Yes, for a week." "Oh uhhh, my roommate like isn't really that into him and doesn't feed him and stuff. He said you can have the cat I guess."

During a lull in the conversation at the bar last night I was thinking about these two stories and they reminded me of something from an Economics class called the Coase Theorem.

The Coase theorem is used in Economics of Law in determining how to assign property rights. For example: Person A really wants to play loud music until 4AM, wrestle around on the floor a bunch, and argue aggressively over whether or not Trotsky was a big pussy for not killing Stalin. Person B lives below person A, is pregnant, needs to work in the morning and would prefer not to hear all those things happening. If this difference of opinion was brought to court who should the judge assign the right to? Meaning, should the judge assign the right to person A and allow him to behave in that way, or should the judge give person B the right and tell A to go be insane somewhere else?

The Coase theorem shows that it doesn't matter who the judge assigns the right to, because in the end the behavior that is most valued will occur. Let's say that person A gets 100 lolz out of his behavior and person B correspondingly gets -30 lolz (30 balls). If Person B is given the right the two should be able to negotiate and Person A will pay some amount greater than or equal to 30 lolz to person B to make them indifferent to whether or not a derelict is vomiting outside in the snow within ear shot of their newborn child.

If person A is given ownership then there isn't any transaction because they value their lolz behavior more than person B is willing to pay to make them stop. No matter what the values are or who is originally given ownership, ownership eventually travels to its highest valued use.

I think the same analysis could be applied to cat ownership in college environments. Lots of college students impulsively buy a cat and some of them get bored of taking care of it after the super awesome kitten attack phase and the following Lolcat phase.

No matter how lame the original cat owner is, the cats will escape and naturally move towards houses where they are valued higher. I.E: places where they will be fed and not die alone.

This all rests on the assumption of low transaction costs. If the neighbors can't negotiate with each other or the cat gets attacked or run over, efficient movement of resources or cats probably won't happen.