Marty Greenfinger loves gardening and has recently developed a fondness for exotic and brightly colored flowers which attract a plethora of bees. His next-door neighbor, Lana Allergic, is allergic to bee stings. Lana claims that the increased presence of bees costs her $100 a month in allergy medications and the inconvenience of having to stay indoors; Marty values his horticultural hobby at $120 a month as it brings him immense joy and relaxation.
Both Lana and Marty live in rent-stabilized condominiums. Lana's rent is $450 a month, while Marty pays $350 a month. The market rate for their condos if they chose to move out would be $550 a month. Additionally, there is a one-time moving cost of $500. The local community association encourages biodiversity, which Marty's garden promotes, but there are no clear guidelines on the matter.
Given these circumstances, discuss what actions Lana and Marty might take to reach a socially optimal solution.
Who should compensate whom and how much so that they are both happy?