Externalities are third party effects arising from production and consumption of goods and services for which no appropriate compensation is paid.
Information gaps exist when either the buyer or seller does not have access to the information needed for them to make a fully informed decision. For example, risks from using tanning salons, the complexity of pension schemes, uncertain quality of second-hand products and knowledge of the nutritional content of foods and drinks.
Market failure exists when the competitive outcome of markets is not efficient from the point of view of the economy as a whole. This is usually because the benefits that the market confers on individuals or firms carrying out a particular activity diverge from the benefits to society as a whole.
Pure public goods are non-rival – consumption of the good by one person does not reduce the amount available for consumption by another person, and nonexcludable – where it is not possible to provide a good or service to one person without it being available for others to enjoy.