In economics, an externality is a cost or benefit to an uninvolved third party that arises as an effect of another party's (or parties') activity. Externalities can be considered as unpriced …

Aug 10, 2025 · What Is an Externality? An externality occurs when an activity by one party causes a cost or benefit to another party. These effects can be either negative or positive.

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

What Is an Externality? An externality is a cost or benefit that is caused by one party but financially incurred or received by another. Externalities can be negative or positive. A …

Externalities are positive or negative indirect outcomes caused by production or consumption activities. Every day, millions of production and consumption activities are taking place. The …

An externality, in economic terms, is a side effect or consequence of an activity that is not reflected in the cost of that activity, and not primarily borne by those directly involved in said …

Externalities occur when producing or consuming a good cause an impact on third parties not directly related to the transaction. Externalities can either be positive or negative. They can …

positive externality, in economics, a benefit received or transferred to a party as an indirect effect of the transactions of another party. Positive externalities arise when one party, such as a …

Positive externalities are good outcomes for others; negative externalities are bad outcomes. A negative externality is when you impose some cost on others through your actions, but you …

Consumption, production, and investment decisions of individuals, households, and firms often affect people not directly involved in the transactions. Sometimes these indirect effects are …