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90 Notre Dame L. Rev. 135 (2014-2015)
Mirrored Externalities

handle is hein.journals/tndl90 and id is 145 raw text is: MIRRORED EXTERNALITIES Lisa Grow Sun* and Brigham Daniels** ABSTRACT A fundamental but underappreciated truth is that positive and negative externalities are actually mirror reflections of each other. What we call mirrored externalities exist because any action with externalities associated with it can be described as a choice to do or to refrain from doing that particular action. For example, if a person smokes and thereby creates a negative externality of more secondhand smoke, then her choice not to smoke creates a positive externality of less secondhand smoke. Conversely, if a person's choice to get an immunization confers a positive externality of reducing vectors for disease transmission, then a choice not to get an immu- nization necessarily imposes negative externalities on third parties in the form of more vectors for disease. In each set, the negative externalities are the inverse-the mirror image-of the positive externalities. Thus, we have two possible characterizations or framings of any decision, one of which focuses on negative externalities and the other of which focuses on positive externalities. Which framing tends to predominate may be influenced by a number of factors, including soci- ety's baseline sense of the actor's legal or moral entitlement to engage in (or refrain from engaging in) particular behavior, the availability of a villain to whom to ascribe negative externalities, and the relative invisibility of certain externalities until disaster strikes, when the negative fram- ing becomes the face of the crisis. Ultimately, the framing of externalities has profound effects on both the way we think about and process externalities and on our politics and policy development. We see profound potential impacts offraming on human perception of risk and opportunities, particularly due to the impli- cations of the Nobel Prize-winning work of behavioral economists Amos Tversky and Daniel Kahneman. Their work on human perception suggests that due to loss aversion, the availability heuristic, and our bimodal response to catastrophic risk, we will give much greater weight and attention to negative externalities and consistently undervalue positive externalities. While posi- tive externality frames are more effective in inspiring voluntary action, negative frames have serious implications for policy decision-making. The choice to emphasize either the positive or negative externality in the mirrored set shapes the array of policy prescriptions we are likely to © 2014 Lisa Grow Sun & Brigham Daniels. Individuals and nonprofit institutions may reproduce and distribute copies of this Article in any format at or below cost, for educational purposes, so long as each copy identifies the author, provides a citation to the Notre Dame Law Review, and includes this provision in the copyright notice. * Associate Professor, BYU Law School. ** Professor, BYU Law School. We would like to thank Carol Rose, J.B. Ruhl, Jim Salzman, John Nagle, Victor Flatt, Rob Verchick, Zachary Bray, Michael Madison, RonNell Andersen Jones, Michalyn Steele, Aaron Nielson, Stephen Mouritsen, Justin Pidot, and workshop participants at the University of South Carolina, Loyola New Orleans, and University of Denver Law Schools for their insightful comments and critiques. We are also grateful to Shawn Nevers, Brandon Curtis, Joel Hood, Chase Thomas, Christy Matelis, Victoria Chen, Nathan Sumbot, Steven Oliver, and Ruth Dittli for their research assistance.

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