externality
/ˌekstɜːrˈnælɪti/
a cost or benefit affecting parties not involved in a transaction
externality in a sentence
“Pollution is a negative externality of manufacturing.”
Origin of externality
From external (Latin externus outside) + -ity
Related Words
club good
a good that is excludable but non-rivalrous
common pool resource
a resource that is rivalrous but non-excludable
mechanism design
creating rules to achieve desired outcomes given strategic behavior
incentive compatibility
a system where honest behavior is in each participant's interest
social dilemma
a situation where individual rationality leads to collective irrationality
tragedy of the commons
depletion of shared resources due to individual self-interest