Externality


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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.
References in periodicals archive ?
The California Supreme Court did not explicitly address this type of market externality logic.
Based on the above, it can be found that the issue of externality of the vacancy rate, fare, and subsidy of the taxi industry has rarely been presented in the prior research related to the optimization of taxi regulation.
We use two variables to measure the accident externality. (3) One is the average number of kilometers driven per vehicle since the more kilometers that other drivers cover, the greater the potential for each driver to risk causing an accident.
That is, if an act results in a negative externality, refraining from that act necessarily creates a positive externality, and vice versa.
The emerging understanding on scale and scope of climate change problem is also supported by studies in climate economics where it has been declared a serious case of market failure and externality of uncontrolled industrial activity in the past few centuries.
The previous section demonstrated that city shapes were strongly correlated, not with the size of retail externalities in total, but with the size of the externality effect falling within city borders.
One way of alleviating the problem of externalities would be for the two separate firms to merge so that the externality is internalized and at a cost much less than if regulatory policies were instated.
Pecuniary and Technological Externality, Factor Rents, and Social Costs.
As Di Giovanni writes, the Logic embodies a "movement by which thought develops into ever more complex forms and which can be traced from within thought itself simply by pursuing its internal logic." (6) In the Philosophy of Spirit, Hegel writes that language is an internal externality, (7) and, in the Encyclopedia Logic, he writes that thought (Denken) is the (spiritual) substance of things in the world.
To illustrate this, consider a common market failure, an 'externality', and how it might apply to PIA.