Well, maybe if you wanted to give an example we could take about how it is done. But the framework has to be capitalism, not crony capitalism, not some socilism capitalism mix. No central authority. As soon as you have a central authority, you have cronyism plus socialism, and awful mix.

For example, a negative externality might be noice from the roads. My questions would be who owns the roads?Is it your road? Don’t let trucks on it. Another might be that an empty lot gets filled with trash when people pass by because its no one job to pick it up… who owns the lot?

As for what happens with conflict? This is but one possibility
https://www.youtube.com/watch?v=jTYkdEU_B4o