Street Strider Embarrassment

Phil wants to ride his street strider, but his whole family thinks it is very uncool. Luke points out that he has friends on the street that might see, and Claire not so subtly threatens to leave him if he rides it suggesting she is not getting any joy from him enjoying his street strider and in fact it is harming their relationship. While Phil derives private benefits from the StreetStrider (like living healthier), he is also imposing social costs on his family. Given that his impact is relatively localized, the Coase Theorem would suggest that the Dunphy family can come to an agreement about whether Phil can keep his bike.

 

See more: Coase Theorem, external costs