The concept of externality was first developed by Alfred Marshall in the 1890s [1] and achieved broader attention in the works of economist Arthur Pigou in the 1920s. [2] The prototypical …

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 …

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 …

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 …

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 …