Externalities

In every economic transaction there is a willing buyer and a willing seller. and they agree on a price that benefits both. But there are spillover effects in many economic transactions—costs and/or benefits that are transferred to third parties. Friedman called these spillovers "neighborhood effects." Today, most economists call them "externalities. At their most basic, externalities don't have to involve buying and selling. If you smoke in a restaurant instead of stepping outside it's ea...