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Externalities: Why We Can Never Do "One Thing"

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https://fs.blog/2019/09/externalities-why-we-can-never-do-one-thing/

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Externalities: Why We Can Never Do "One Thing"
No action exists in a vacuum. There are ripples that have consequences that we can and can't see. Here are the three types of externalities that can help us guide our actions so they don't come back to bite us.

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Externalities

An externality affects someone without them agreeing to it. It can be positive or negative. Most externalities are small but can make a significant impact over time. Understanding the types of exte...

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The First Law of Ecology

We can never do one thing. We should consider what the second-order consequences will be. When we interact with a system, we need to find out what the broader repercussions of our actions...

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Negative Externalities

They can occur during the production or consumption of a service or goods. Calling something a negative externality can be a way of avoiding responsibility.

If a factory pollutes nearby wa...

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Positive Externalities

A positive externality imposes an unexpected benefit on a third party. The producer doesn't agree to this, nor do they receive a 'reward' for it.

  • Scientific research can have applicat...

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Positive Externalities Issues

  • Someone who comes up with a solution cannot expect compensation each time the solution gets used. It results in reduced incentives to invest time and effort to discover new solutions. A...

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Positional Externalities

They are a form of second-order effects. They arise when our decisions change the context of future perception or value.

A person decides to stay an hour after work, but the person still c...

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Luxury Goods

Status symbols like diamonds, Lamborghinis, tailor-made suits lose their value if they become cheaper or if too many people own them. They derive their value only in comparison to the avera...

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Consider your Externalities

Externalities are everywhere. It's easy to disregard the impact of our decisions - to stay late at the office or to drop litter. We run the risk of paying a price if we do not mind our actions.

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SIMILAR ARTICLES & IDEAS:

A network is more than just a group of individuals

A network is more than just a group of individuals

In addition, a network has ties between people.

The connections between individuals are what changes a group to a network.

Social networks have a strong effect on our ideas

You may think it was your idea to keep your desk neat or speak up in a meeting, but your behavior was likely influenced by those in your network.

Once we understand social networks, we can use its power to shape workplaces for the better. You can turn an unhappy team into an innovative, collaborative one.

We naturally copy others

Your experiences in the world is not only a product of your own desires, actions, and thoughts, but also a product of the desires, actions, and thoughts of people around you.

The things that are seemingly personal to you are actually very strongly influenced by similar traits in other people. You do have agency. You can choose what to do. But you're also affected by what others are doing. Both are true.

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The Caffeinated and the Un-caffeinated

Morning commuters seem to fall into one of two categories: 
  • the Caffeinated: ready to take on the day—they're reading their morning papers, ...

Grown Ups and Coffee

By 1988 only 50 percent of the adult American population drank coffee. In 1962, average coffee consumption was 3.12 cups per day; by 1991 had dropped to 1.75 cups per day.

At the onset of the 1980s, coffee growers and retailers realized that the current 20-29-year-old generation had little interest in coffee, which they associated with their parents and grandparents.

The "Me" Generation

For the coffee industry to survive, it needed a new marketing strategy. The consumer was changing and coffee-players needed to pay attention.

Crucial questions the 'me' generation will ask: "What's in it for me? Is the product 'me'? Is it consistent with my lifestyle? Do I like how it tastes? What will it cost me? Is it convenient to prepare?"

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The power of caffeine

Scientists determined that a person who was more sensitive to the bitter taste of caffeine drank more coffee.

The stimulating effects of caffeine on the brain act as a kind of positive reinfo...

Genes and coffee

More research is needed to validate whether there is a causal link between genes and specific taste perceptions.

Scientists are planning to delve further into the relationship between taste perception and health - to evaluate if bitter taste genes have implications on disease risks.