Editing Coase theorem (section)

====Assignment problem====

Gruber described three additional issues with attempting to apply the Coase Theorem to real-world situations. The first is known as the assignment problem, and stems from the fact that for most situations with externalities, it is difficult to determine who may be responsible for the externality as well as who is actually affected by it. In the case of a polluted river that reduces the fish population as described by Coase, how can the involved parties determine which factories may have contributed the pollution that specifically harmed the fish, or whether there were any natural factors that interfered in the process. And even if one can determine who exactly is responsible and who is harmed, it is cumbersome to accurately quantify these effects. People cannot easily translate their experiences to monetary values, and they are likely to overstate the harm they have suffered. At the same time, the polluters would likely underestimate the proportion of the externality that they are responsible for.