Monday, November 2, 2009

Positive Externality and Friends-of-Friends


Textbook Definition of Positive Externality: An external benefit resulting from the private actions of individuals

She-conomist Definition: As a result of your roommate being in a relationship with "John," you happen to become acquainted with John's roommate, Steve. Sparks fly, hands/lips unite, and dating magic occurs. Roommate and John's relationship : private actions of individuals :: your relationship with Steve: external benefit (externality)

For those of you who have seen The Holiday, how did Kate Winslet's decision to rent out her cottage to Cameron Diaz, and Cameron's resulting interactions with Jude Law constitute a positive externality situation?

Can you think of any other examples of positive externalities associated with dating? Any success stories?

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