58) In other words, pollution is a negative externality
because the full cost of the pollution associated with the factory's output is not included in the price of the goods it produces.
Focusing on the rancher, for example, we could characterize a rancher who chooses to allow his cattle to roam as imposing a negative externality
on the farmer in the form of destroyed crops.
The paternalistic argument, of course, is that the present self imposes a negative externality
on the future self by discounting too heavily the long-term consequences of consuming "calorie-dense" fast food or sugary beverages.
For purposes of simplification, I consider only two categories of possible solutions to the negative externality
caused by increased GHG emissions: a private-market, Coasian solution and public interventions through price-based or quantity-based regulation.
Criticisms of the viability of bargaining solutions within a Coasean framework, especially in addressing negative externality
problems such as pollution, have been numerous.
the target plus the expected negative externality
that it would suffer
To provide one example, traffic congestion is a negative externality
in which one person's decision to drive harms others.
In other words, the study also suggests that where formal institutions are weak, activities having negative externality
could be curtailed through informal institutions such as social norms and peer effect.
Any contract that adversely affects children could be characterized as inflicting a negative externality
Plaintiffs who incurred a harm resulting from a negative externality
have a built-in incentive to overstate their harm in order to recover a greater amount.
the activity that produces the negative externality
For example, if there is a negative externality
from segregation, it may be optimal to have a harsher penalty for a hate crime committed against a black family living in an otherwise all-white neighborhood than for an otherwise-identical hate crime committed against a black family living in a black neighborhood, in order to provide better incentives for integrating neighborhoods.