Every now and then a flight gets diverted because of trouble onboard. Sometimes, passengers are misbehaving and the decision is made to land and make them leave.

AP has reported that a flight was diverted because of a passenger quarrel over reclining seats. Apparently a passenger tried to recline their seat and the person behind made use of a Knee Defender, a device you can install to prevent the front seat from reclining.

Some time ago, Josh Barro wrote an article for the National Review applying the Coase Theorem to this sort of situation. According to Barro, the passenger behind could negotiate with the person who wants to recline their seat in order to buy them out of the idea.

According to the Coase Theorem, if you have low transaction costs, just clarify the property rights (in this case, the right to recline your seat) and those rights will be negotiated and end up with the person who cares the most about them.

The Theorem is somewhat morally agnostic in this sort of situation: it doesn’t matter very much who gets assigned the right, as long as it’s clear and respected (and for this very reason the Theorem isn’t completely agnostic either).

High transaction costs would have an impact on the initial allocation: passengers are reluctant to negotiate. For this reason, Donald Marron has commented on Barro’s idea, suggesting the ‘reclinee’ (i.e. the person behind the reclining seat) should initially carry the right to recline – this saves a round of negotiations in most cases, if we assume most people are bothered by reclined seats in front of them.

Commenting on the recent events, Barro’s article for the NYT responds to Marron and sticks to the low transaction costs view – he doesn’t think it’s that hard to negotiate with passengers.

There are some important issues that I haven’t seen addressed in this debate so far. To begin with, even though it’s not allowed to defend it as it sees fit because of security regulations (and this is perhaps a different debate), the airline owns the plane. The whole thing. Every seat. And that seems to be clear enough.

Moreover, I don’t usually think about this detail when I buy a ticket, but it seems that non-reclinable seats (those in the back) are usually available for the same price as normal seats. If, instead, they’re clearly cheaper, then the implicit idea is that your flight ticket gives you the right to recline your seat, not least because you paid for it. The airline could make this clear, of course, in the small print, as a kind of contract clause. And those who want more space already pay for more space, even if they’re flying economy.

Now, of course there’s the issue of people having different sizes and not being very well served by the default space available. Some airlines offer more, some offer less space. I can’t help but think that if this variable is really important (and it seems to be), competition in the sector would make room for more diversity of services offered, and creative arrangements of passenger space onboard. This could drive the price of passenger space down. However, it’s a very heavily regulated market, so the situation isn’t ideal.

Then, there’s the issue of the Knee Defender. Of course, with no explicit rules, a passenger can get one and use it, probably annoying the person who wants to recline the seat. The airline can intervene and make it clear that the person paid for a seat that reclines. The airline could even have a special rule forbidding Knee Defenders onboard the flight. Just because it wants to, because it’s their plane.

In short: If you rent the airline seat for the flight, it can come with the right to recline it. If you own a Knee Defender, the airline could ask you to leave it behind (or keep it), or a passenger could buy it from you, so they can recline their seat.

Why go with the Coase Theorem at all? Maybe the good, old, less agnostic, property rights can do just fine in this sort of situation.