Market Failure

“A loss of economic efficiency that can occur when equilibrium for a good or service is not achieved or is not achievable.” Source: Gabriel Weinberg's Mental Models I Find Repeatedly Useful

“An externality is the cost or benefit that affects a party who did not choose to incur that cost or benefit.” (related: tragedy of the commons — “A situation within a shared-resource system where individual users acting independently according to their own

“The study of decisions in transactions where one party has more or better information than the other.” (related: adverse selection — “when traders with better private information about the quality of a product will selectively participate in trades which benefit them the

“People are happy to do things occasionally when they are not paid for them. In fact there are some situations in which work output is negatively affected by payment of small amounts of money.” Source: Gabriel Weinberg's Mental Models I Find Repeatedly