Caithness Energy. a large New York company is building wind farms in eastern Oregon. Before construction, the company offers residents $5,000 each to sign a waiver stipulating that they will not complain about excessive noise from rotating wind turbines [Yardley, 2010]. Analyze this offer in terms of the Coase theorem. In the terms of the Coase theorem, once property rights are established, government intervention is not necessary to deal with externalities. In this case, if Caithness Energy reaches a negotiating agreement with all residents affected by the noise pollutant (wind turbine) by signing a $5,000 waiver, then government intervention will not be necessary. However, if some residents refuse to sign the waiver, this will result in conflict and the government will have to intervene. Caithness Energy has since offered affected residents $5,000 not to complain; apparently the value of operating the wind turbines was actually greater to the company than the value of quiet was to the residents, and it was probably easier for the company to proactively offer compensation to households than going to court.