[rouhgctz] Dual externalities and Loud neighbors

A bunch of neighbors mutually agree not to complain when others are loud, allowing all to benefit in being able to have loud social gatherings.  This drives property values down as it becomes less attractive neighborhood to live if you like quiet.

Some new denizens move in, attracted by the relatively low property price.  They subvert the system by then calling in noise disturbances to the police, thereby gaining the benefits of both the low property price and quiet.

This illustrates the duality of externalities.  While "making sound" is generally known as an action which causes an externality, "making quiet", aided by the arm of the law, also causes an externality: the new denizen's actions affect more than just themselves, obviously -- that's the point of calling the police.

It depends on where the property line is.  The original neighbors had mutually agreed, in spite of the law, that one's property claim does not extend to quiet.  The new denizen takes advantage that the legal property line is different from where people think it is.

Thus, whenever an discussion of externality happens, it is equally a discussion of property, so requires justifying that the property line is drawn in the correct place.