Where does externality collide?

A cost or benefit from someone's activity that falls on a third party who is not part of the exchange and whose position is not reflected in the market price: factory smoke that dirties a neighbour's laundry is a negative externality, and a vaccination that protects the people around the vaccinated person is a positive one. Pigou's 1920 The Economics of Welfare named the gap between private and social cost and proposed a corrective tax, and Coase's 1960 The Problem of Social Cost reframed it around who can bargain with whom over the harm. Here the word points at an uncompensated effect on a bystander in a market, priced in money, not at a feature of relations in metaphysics or a person's responsiveness to cues in psychology.[1][2]

Unit

A unit of cost or benefit landing on a bystander, valued in money

Recovery means

Internalised when a tax, subsidy, liability rule, or bargain makes the actor face the full social cost

Measured by

Estimated by valuing the third-party harm or gain, for example the social cost of a tonne of emissions

In metaphysics, the question of whether the relations a thing enters are external to it, so that its nature would be the same with or without them, or internal to it, so that they help make it what it is: to call relations external is to say a thing is what it is independently of how it stands to other things. Bradley argued that all relations are internal, binding everything into one whole, while Moore's 1919 External and Internal Relations and Russell's logical atomism defended external relations and a world of separable things. Here the word describes a property of relations themselves, argued in the abstract, not a market effect on a bystander or a behavioural leaning toward outside cues.[3]

Unit

A relation classed as external to, or internal to, the natures of its terms

Recovery means

Not applicable

Measured by

Argued by asking whether removing or altering a relation would change what the related thing is

A behavioural tendency to be governed more by external, cue-based signals, such as the sight and smell of food, the time on the clock, or how much is on the plate, than by internal bodily states such as hunger and fullness. Schachter's 1968 Obesity and Eating proposed that heavier people are more strongly driven by outside food cues, and Rodin's 1981 review recast this externality as a trait that varies across people at every weight rather than a mark of obesity. Here the word names a property of a person, how far their behaviour tracks the outside rather than the inside, not a cost on a bystander in a market or a status of relations in metaphysics.[4][5]

Unit

A person's degree of responsiveness to outside cues rather than inner signals

Recovery means

Not applicable

Measured by

Assessed by behavioural tests of eating and choice under manipulated external cues versus reported hunger