 Analyzed in economic terms, the amount of risk that is acceptable in society should ideally be determined in the same way that every question about the creation of a cost or benefit should ideally be determined, that is, through efficient market transactions. In a perfectly competitive market, with complete information and no transaction costs, parties could be expected to negotiate, and determine the terms on which they exposed each other to risks (Posner 1983). As Ronald Coase puts it in one of the foundational texts of the economic analysis of law (1960), in conditions of perfect competition, parties concerned to advance their interests would always bargain around legal rules to reach an efficient result. A rational enterprise will be indifferent between engaging in a profitable activity and receiving equivalent payment to refrain from engaging in it. Without transaction costs, legal rules would make no difference to the allocation of resources; the only effect of the legal rule would be to determine the direction of payments. Coase acknowledges that we live in a world in which transaction costs make bargaining infeasible. The case of accidental injury illustrates this particularly starkly. Nobody is in a position to negotiate with everyone who might be injured through the side effects of their driving, cycling, or other activities, or through products they produce; conversely, nobody could be in a position to negotiate with everyone who potentially exposes them to such risks. Thus, there is a problem which economists identify as market failure: the parties are unable to reach a mutually beneficial arrangement. Economic analysis recommends the adoption of legal rules that will provide people with incentives to approximate the outcome that would have been achieved by market transactions with full information and no transaction costs.