Scientific Definition
A cost or benefit borne by someone outside the transaction.
Plain-English Definition
A cost or benefit borne by someone outside the transaction.
Feynman Explanation
If your business model needs externalities, you don't have one.
Core Principle
A cost or benefit borne by someone outside the transaction.
Mechanisms
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Inputs (Triggers)
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Outputs (Behaviors)
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Behavioral Signature
If your business model needs externalities, you don't have one.
Examples
- Pollution, ad-network attention drain, and social-media outrage are externalities.
- Internal externalities — teams dumping work on each other — kill productivity.
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Famous Experiments
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Design Principles
- Price externalities into incentives, not just into press releases.
Measurement Approaches
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Evidence
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The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Price externalities into incentives, not just into press releases.
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Interactive Mini Network
Click any neighbor to re-center the graph and follow the threads of connection.
Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
Asymmetric information attracts the worst counterparties.
Signals whose value depends on being expensive to fake.
Costly actions that credibly communicate hard-to-observe traits.
Clear ownership of outcomes, not just tasks.
We defer to perceived expertise, rank, or uniform.
Vastness that exceeds existing schemas dissolves the self briefly.
Negative feedback returns a system toward a target.
Membership in a group is a baseline human need.
Individually rational choices that produce a collectively bad outcome.
We seek tasks where we feel effective and improving.
Competing loyalties that compromise judgment.
Value is judged against whatever sits next to it.