As Indicated by the green arrows, the Intertemporal externality
is an externality
that renters impose on the future renters and the landowner.
57) Economists define a technological or environmental externality
as the "indirect effect of a consumption activity or a production activity on the consumption set of a consumer, the utility function of a consumer, or the production function of a producer.
The only choice that non-Ricardian agents have to expand their consumption due to the externality
effect is, instead, to work more.
On the contrary, deep legitimacy questions arise when individual states have the capacity to effectively veto the emergence of universally binding obligations in contexts where the behavior of an individual state raises justice-sensitive externality
First, how does the externality
affect the individual's loss probability and loss severity?
Focusing on the rancher, for example, we could characterize a rancher who chooses to allow his cattle to roam as imposing a negative externality
on the farmer in the form of destroyed crops.
In the following section, we examine the interplay between city shape, externality
size, and local government behavior.
In the history of welfare economics, the classical approach to solving negative externality
problems, such as pollution, was through the use of regulation, or what Mill (1871) termed "authoritative" solutions, "in which certain types of conduct are prescribed or proscribed" (Medema 2009: 37).
Second, efficiency can only be assured if the party to the externality
who was present first in time is the one designated to receive compensation, for it is only under such a scheme that the party who comes to the harm (or threatens to do so) has all relevant costs internalised to it and so faces the incentives necessary to make proper (that is, efficient) decisions (1971: 183).
Global warming is a negative externality
and the abatement of GHG emissions is a global public good.
Given the nature of the public and in accordance with the economic approaches described by Jaffe (1996), the research and development externalities can be taken as an example of positive externality
, in fact, the concept of positive externalities is very closely related to the concept of "public good".
target plus the expected externality
that it would suffer if a