Externality

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Related to Negative externalities: Positive externalities

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 ?
Even in such circumstances, however, activists have still sometimes attempted to identify segments of the responsible population as villains to be blamed for negative externalities. Conversations with Notre Dame Law Professor John Nagle about this point resulted in the following memorable example: in 2002, the Evangelical Environmental Network launched a "What would Jesus drive?" campaign shaming SUV drivers for "filling [their] neighbors'] lungs with pollution." Would Jesus Drive an SUV?, ABC News (Nov.
Environmental pollution created by the negative externalities of an economy can be resolved in a well-functioning price system.
Several economic instruments and approaches have been forwarded by economists over the period of time to internalise the price of these negative externalities.
Policymakers focusing on the negative externalities favor a regulatory approach based on carbon tax or cap-and-trade system while policymakers emphasizing inadequate abatement technology favor a more market-oriented strategy based on subsidies and other incentives.
Transferable negative externalities theory shows that a trader who does not cooperate with the rest polluting businesses will cause great environmental damage.
(p.186-187) When a large portion of economic activity is in the form of exports, the home state is able to capture the economic rents from foreign visitors, while exporting many of the negative externalities when the visitors return home.
Negative externalities including disinformation, false rumors, false science, libel, immorality, indecency, incitement to crime, sedition, etc., are less discussed, but certainly exist and, outside the field of economics, they are the objects of sociological, historical, and institutional analyses.
According to those who explain contract law from an economic or efficiency perspective, the goal of limiting negative externalities is behind several features of contract law, (204) from the refusal to enforce certain contracts on the basis of illegality or public policy to the limitation of contractual freedom through mandatory default rules.
of negative externalities, innovators and patent owners may engage in
DOES THE EXTREME degree of inequality in America today really create, as Pigou would put it, negative externalities? Does the fact that hedge-fund manager Mr.
We submit that the reconfiguration of downtown areas will not only result in the production of new positive externalities but will also reduce the negative externalities associated with urban sprawl.