The Problem of Externality

  title={The Problem of Externality},
  author={Carl J. Dahlman},
  journal={The Journal of Law and Economics},
  pages={141 - 162}
  • Carl J. Dahlman
  • Published 1 April 1979
  • Economics
  • The Journal of Law and Economics
ON the modern research agenda externalities occupy a rather prominent position. The increasing complexity of modern technology and society seems to create yet additional unwanted side effects that require classification on a lengthening list of externalities. However, externalities are of interest not only as current policy issues but also from a more theoretical point of view. Using Pigou's terminology, we say that when an externality is present there is a divergence between private and social… 

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