In economics, an externality is an indirect effect of consumption or production activity on agents other than the originator of such activity. We observe that internet is enabling the design of information services that become smarter more they are used because of the data generated in the process. We give examples from web search to make the notion of data externality concrete and propose that...

This paper examines the validity of the ̄ve fundamental theorems of international trade and some other issues in a general model of externality. The model allows the possibility of own-sector externality and cross-sector externality. This paper derives conditions under which some of these theorems are valid, and explains what the government may choose to correct the distortionary e®ects of exte...

Altruism or ‘regard for others’ can encourage self-restraint among generators of negative externalities, thereby mitigating the externality problem. We explore how introducing impure altruism into standard regulatory settings alters regulatory prescriptions. We show that the optimal calibration of both quantitative controls and externality taxes are affected. It also leads to surprising results...

We analyze the social and private learning at the symmetric equilibria of a queueing game with strategic experimentation. An infinite sequence of agents arrive at a server which processes them at an unknown rate. The number of agents served at each date is either: a geometric random variable in the good state, or zero in the bad state. The queue lengthens with each new arrival and shortens if t...

We develop a two-period general equilibrium model of portfolio delegation with competitive, differentially skilled managers and convex compensation contracts. We show that convex incentives lead to significant equilibrium mispricing, but reduce price volatility. In particular, price informativeness and volatility may exhibit opposite behaviour. Investors do not internalize the externality that ...

We propose a model on strategic formation of communication networks with (i) link specificity: the more direct links somebody maintains, the less she can specify her attention per link, the lower her links’ value, while this negative externality was previously ignored in the communication context, and (ii) value transferability via indirect links for informational but not for social value from ...

We study socially vs individually optimal life-cycle allocations of consumption and health care, when individual health expenditure curbs own mortality but also has a spillover effect on other persons’ survival. Such spillovers arise, for instance, when health care activity at aggregate level triggers improvements in treatment through learning-by-doing (positive externality) or a deterioration ...

This paper demonstrates that considering alternative means of human capital accumulation, such as learning-by-doing, overturns the presumption that formal education is unconditionally bene ̄cial for economic growth. It analyzes a model in which the average level of human capital creates externalities in future human capital accumulation and individuals can augment their human capital with work e...

Many wearable device products come into the market recently. As a specific application of mobile health, wearable device has garnered attentions form both practitioners and scholars. In this paper, we investigate the impact of network externality and optimal product design of wearable device in a two-dimensional product differentiation model considering a market that has a broad product variety...