[pjvsvsrtrxc]

Yes, it is.

> ex·ter·nal·i·ty: a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved

The buyer is an "other part[y]" from the seller's (edit: or better yet, developer, who might just be contracted by the ultimate seller...) perspective, and performance is basically impossible to quantify, therefore price.

Moreover, even if you want to limit externalities to being completely third-party... sure: Pollution. More electrical generation capacity needed.

[wbsss4412]

That’s an incredible stretch of the definition.

The other parties are other parties besides the buyer and seller.

> Moreover, even if you want to limit externalities to being completely third-party... sure: Pollution. More electrical generation capacity needed.

^this is an externality, everything else is just a poor understanding of the concept.

[xupybd]

So would a less efficient engine in a car be an externality?

[pjvsvsrtrxc]

The pollution from such a car is undeniably an externality. Just Google "is pollution an externality".

The less efficient engine itself is not because it is priced in. Because the government made them put it on the window of every single car sold.

[wbsss4412]

“Priced in” means that the full social cost is reflected in the price.

A window sticker is not “pricing in” the externality.

[wbsss4412]

Pollution is the externality.

A less efficient car engine means that the magnitude of the externality (in this case, the externalized cost, you can have externalized benefits as well) is larger.