A confectioner made noise that interrupted a Dr.'s office. The damages to the Dr. are $100, cost to move confectioner is $80, cost to move office is $50.
It showed: the polluter (confectioner) paying the Pigou tax of $80 isn't the most efficient. Also, people will bargain; if the Confectioner has the right to make noise, the Dr. will pay to move $50. If Dr. has a right to silence, they will bargain for between $50 and $80. Finally, if transaction costs are too high, nothing will be achieved.