s ▁Category : 1 9 th - century ▁Pres by ter ian ▁minister s <0x0A> </s> ▁" The ▁Problem ▁of ▁Social ▁Cost " ▁( 1 9 6 0 ) ▁by ▁Ron ald ▁Co ase , ▁then ▁a ▁fac ulty ▁member ▁at ▁the ▁University ▁of ▁Virginia , ▁is ▁an ▁article ▁dealing ▁with ▁the ▁economic ▁problem ▁of ▁external ities . ▁It ▁draw s ▁from ▁a ▁number ▁of ▁English ▁legal ▁cases ▁and ▁stat utes ▁to ▁illustrate ▁Co ase ' s ▁belief ▁that ▁legal ▁rules ▁are ▁only ▁just ified ▁by ▁reference ▁to ▁a ▁cost – ben ef it ▁analysis , ▁and ▁that ▁n uis ances ▁that ▁are ▁often ▁regarded ▁as ▁being ▁the ▁fault ▁of ▁one ▁party ▁are ▁more ▁symmetric ▁conflicts ▁between ▁the ▁interests ▁of ▁the ▁two ▁parties . ▁If ▁there ▁are ▁sufficiently ▁low ▁costs ▁of ▁doing ▁a ▁transaction , ▁legal ▁rules ▁would ▁be ▁irrelevant ▁to ▁the ▁maxim ization ▁of ▁production . ▁ ▁Because ▁in ▁the ▁real ▁world ▁there ▁are ▁costs ▁of ▁b arg aining ▁and ▁information ▁gather ing , ▁legal ▁rules ▁are ▁just ified ▁to ▁the ▁extent ▁of ▁their ▁ability ▁to ▁allocate ▁rights ▁to ▁the ▁most ▁efficient ▁right - b ear er . ▁▁ ▁Al ong ▁with ▁an ▁earlier ▁article , ▁“ The ▁Nature ▁of ▁the ▁F irm ”, ▁" The ▁Problem ▁of ▁Social ▁Cost " ▁was ▁c ited ▁by ▁the ▁Nobel ▁committee ▁when ▁Co ase ▁was ▁awarded ▁the ▁Nobel ▁Memorial ▁Prize ▁in ▁Econom ic ▁Sciences ▁in ▁ 1 9 9 1 . ▁The ▁article ▁is ▁found ational ▁to ▁the ▁field ▁of ▁law ▁and ▁econom ics ,