Externalities

Externalities are external economies/diseconomies emanating from an activity, affecting others who have nothing to do with the activity.   An externality occurs in economics when a decision, for example to pollute the atmosphere, causes costs or benefits to individuals or groups other than the person making the decision.  Externality cost or benefit are not accounted in the price of goods or services.  Externalities may be positive or negative. For example, Bee-keeping has both externalities, i.e. positive externalities by pollination and negative externalities by a sting to passer-by. Positive externalities benefits one party by action of another party. Negative externalities imposes costs to one party by action of another party. Alongwith, network externality occurs when the action of one party encourages another party to perform same action. Pecuniary externality arises from a particular action taken by an individual which benefits him but worse off others. Common property resource externality occurs when the action of one party betrays another to enjoy the benefits of goods by making them worse off.