When driving down to Houston, it is not uncommon for me to get stuck behind semi-trailer trucks in both lanes. It is frustrating because car drivers can't pass them, sometimes for a very long time when the trucks are driving uphill. I've asked friends of mine who are truckers why the truck in the fast lane doesn't speed up, or the one in the slow lane doesn't slow down so that the other truck can pass them more quickly. They argued that changing speeds decreases fuel efficiency, driving up costs. I asked how much they stood to lose in each case, and they said: 'maybe a buck.'
a. Suppose each truck I encounter in this way slows me down by fifteen minutes, and I value my leisure time at twenty-four dollars an hour. (If you like, assume I am a typical car driver, and that only one car needs to pass each hour). Explain what should happen if I had the property right to the fast lane. Then explain what should happen if the trucker had it. Is there a difference?
b. Given your answer in (a), it appears better for truckers to allow me to pass. Yet they don't. How is this a breakdown of the Coase theorem?
