This Turkish Airways ad shows the value of network externalities to a market. A network effect occurs when the value of a product or service depends on the number of users. Network effects are typically positive, such that the more people using the product, the more valuable the product becomes. Airlines are an example of network effects, as the ad points out, because the more places they fly, the more valuable the flights are to the people purchasing the tickets.
Downsizing — Private vs Social Perspective
A scientist has created a way to solve overpopulation: shrinking people down to a fraction of their size and having them live in small communities. The movie shows a man (Matt Damon) at a company lecture and consulting with a realtor for a home in a small community. The interaction between the two demonstrates the personal and social tradeoffs of a positive externality. The family shrinking themselves down is doing it for personal reasons, namely to save on living expenses and to no longer work, but there are social benefits at play as well. Having everyone shrink to a fraction of their size can help alleviate overpopulation and reduce human waste.
Thanks to Amanda Yaya for the suggestion
Life in Pieces — Coupons as gifts
Matt isn’t the best at giving gifts and he’s realizing that this year. Matt gives his wife a homemade coupon book that she decides to finally cash in to show him how awful the gifts are. After a while he doesn’t work as hard, but then at family dinner he finds out that no one really appreciates his gifts because it doesn’t seem like he puts much thought into them. There is a small line about positive externalities because Jen got a flu shot for her birthday once, which her husbands announces was “the gift that keeps on giving.”
Life in pieces also has another great clip on opportunity cost that’s worth checking out!
The Simpsons — Prohibition
Springfield residents are clamoring to re-enact prohibition in town, but the City Council feels like the positive externalities outweigh the costs associated with alcohol. The County Clerk finds an old law for Springfield ordinance that actually outlaws alcohol. The new Duff Zero (alcohol-free beer) isn’t as popular as the original and the Duff factory has to shut down.
In this quick Axe commercial, we can observe both positive and negative externalities associated with cologne use. The original wearer didn’t realize the (good and bad) impact the second elevator guest would receive from his use of Axe Body Spray, and thus didn’t take that into account when he was applying it.
Time — Bees & Almonds
This clip covers the production externalities associated with beekeeping.