From Game B Wiki
Jump to navigation Jump to search

Externalities are factors that should go into a decision or are affected by a decision, but are not part of the decision making process. Any effects on them are externalized. In current structures, externalizing as much as possible is incentivized. If a company can externalize the damage from pollution caused by their production outside of their balance sheet, they make more profit. Striving to make more profit is commendable economic behavior.