prior probability

A flat-out legal prohibition (e.g. “thou shalt not …”) represents a coercive, non-market approach to a given social problem. So, why aren’t legal bans always effective? Consider, for example, the tour bus ban approved last November by San Francisco’s Municipal Transportation Agency, which voted late last year to ban all sightseeing buses from a 25-square-block around Alamo Square Park—including the picturesque Steiner Street (pictured below), which appears on the opening credits of the TV series “Full House”–after many residents of this scenic and historic neighborhood complained of the buses and lobbied for a bus ban. According to this report by Evan Sernoffsky of the San Francisco Chronicle, many tour bus drivers are simply ignoring the ban: “With only a small chance of getting caught and cited, some bus drivers are flouting the ban and continuing to chauffeur groups close to the famed Victorian homes on Steiner Street …” The SF Chronicle’s report also notes that “San Francisco police officials are aware that some buses are breaking the new rules but say writing $100 tickets to drivers doesn’t rank high on the department’s priority list.” In other words, compliance with a law is not a given but rather a function of many factors, such as the severity of the penalty and the risk of getting caught.

By the way, instead of a draconian ban, why isn’t there room for a mutually-beneficial Coasean bargain between the tour bus operators and the neighbors? (Photo Credit: Wikipedia)