Externalisms
Externalisms, also known as externalities, are side effects of an economic activity that affect third parties not directly involved in that activity. These effects can be either positive or negative. A positive externality occurs when an activity benefits a third party. For example, a beekeeper who keeps bees for honey unintentionally pollinates nearby crops, benefiting the farmer. This pollination is a positive externality.
Conversely, a negative externality occurs when an activity harms a third party. A classic example is pollution
Externalities are a common topic in economics because they represent a market failure. In the presence of