Negative externality: The costs imposed on a third party of a decision
Positive externality: The benefits to a third party of a decision
Internalising an externality: Alterring incentives so that people take account of the external effects of their actions.
Positional externality: Purchases or decisions which alter the context of the evaluation by an individual of the positional good.
Positional arms race: A situation where individuals invest in a series of measures designed to gain them an advantage which simply offset each other.
Coase theorem: A proposition that if private parties can bargain without cost over the allocation of ressources they can solve the problem of externalities on their own.
Transaction costs: The costs that parties incur in the process of agreeing and following through on a bargain.
