Individuals often make decisions that are in their own best interest, and often disregard the impact they may have on other people. Whenever this happens, individuals are creating an externality. Someone else either benefits or is harmed by that outcome. In the case of someone putting on deodorant, that could have spillover benefits from people getting to smell a “fresh scent.” If too much is applied, it could annoy others are turn to a negative externality.
Mumbai drivers are apparently notorious for honking, even when the light is red and people can’t move. The Mumbai police decided to incentivize drivers in order to reduce some of the noise pollution in the city. The police installed noise meters and if the decibel level reaches a certain threshold, the timer on the lights resets. A message flashes to let drivers know that the more they honk, the longer they wait!
Another fun policy intervention occurred in Europe to help drivers slow down.