Standard economic theory predicts goods with positive externalities will be underproduced because the producer cannot capture the full value of what is produced (some people can enjoy it for free, without compensating the producer). From
a biography of Al Wight, who, writing as
James Herriot, became the world's most famous veterinarian and made the Yorkshire dales world famous, is this lovely example, which occured one day when Wight went shopping for fireworks.
[H]e made a visit to a shop [and] asked for rockets.
Another customer overheard his request and leaned towards him. "Don't buy rockets, Mr. Wight," he whispered, "they 'ave a good selection o' Roman candles an' some right good Catherine wheels, at good prices an' all!"
Alf was mystified. "My kids love to see rockets soaring to the sky. Anyway, what's wrong with rockets?
the man eased in closer. "Why, everyone else can see 'em!"
