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Externality
(redirected from Positive externalities)

   Also found in: Dictionary/thesaurus, Wikipedia 0.02 sec.
Externality
The cost or benefits of a transaction to parties who do not directly participate in it. Externality can be either positive or negative. For example, a merger can lead to higher share prices and bonuses for employees, benefiting shareholders and employees at the two companies merging, This can create wealth and positively impact a community. On the other hand, the merger can drive a competitor out of business, which results in layoffs and reduced wealth, which can hurt a community. Externality is also called spillover or the neighborhood effect. See also: External benefit, External cost.


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Academics, for example, emphasize the positive externalities from education and use those claims to justify government support, but the evidence for such externalities is modest.
The emerging network interdependencies, fostered by the major positive externalities that have been recognized by the industry''s professionals, have created new systems of distribution where the seller is at the same time the buyer and the processor of the requested information.
The two most common justifications for the current government involvement in the student loan market are the existence of a market failure and positive externalities that make the privately funded level of educational attainment socially sub-optimal (Patrinos, 2000; Poterba, 1996).
 
 
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