"If we assume Coase’s Theorem applies, it means that the parties will negotiate an efficient result whatever the external legal rules governing their conduct happen to be. A tragedy will not occur in such a scenario, because the parties are cooperating through their negotiation. If the pasture were continually open to new entrants, it is hard to imagine that this cooperation could last. Each new entrant would need to be paid off, eventually exhausting the resources of existing herdsmen. Indeed, new people would show up, if they had a legal right to use the pasture, simply to get a pay-off. In addition, as the number of herdsmen increases, the costs of bargaining increase as well. Eventually, without sophisticated governance mechanisms, these transaction costs would become too unwieldy to reach a deal."