However, the externality also increases the aggregate cost to the economy and society making it a negative externality. Externalities are negative when the social costs outweigh the private costs.

Production externality refers to a side effect from an industrial operation, such as a chemical company leaking improperly stored chemicals into the water table. Production externalities can be ...

Uncertainty problems are far reaching. In fact, the well-known moral hazard is a form of externality in which decision makers maximize their benefits while inflicting damage on others but do not bear ...

In the case of pollution—the traditional example of a negative externality—a polluter makes decisions based only on the direct cost of and profit opportunity from production and does not consider the ...

For James Meade, the perfect example of a positive externality was the relationship between apples and bees. Imagine, wrote Meade in 1952, a region containing some orchards and some bee-keeping.

Katalin Springel, Network Externality and Subsidy Structure in Two-Sided Markets, American Economic Journal: Economic Policy, Vol. 13, No. 4 (November 2021), pp. 393-432 ...

The architecture of securities clearing and settlement in the United States creates an externality: investors do not always bear the full cost of settlement risk for their trades and can impose some ...

References University of Auburn: Externality Fundamental Finance: Negative Externality University of California at Berkeley: Externalities, Market Failure, and Government Policy ...

This paper compares two estimators—the Border Approach and an Instrumental Variable (IV) estimator—using a unified framework where identifying variation arises from “preference externalities,” ...

This negative public externality was the main argument used by proponents of the excise on SSBs, one of the contentious features of Republic Act (RA) 10963, or the Tax Reform for Acceleration and ...