Consider two ways to protect your car from theft. The Club (a steering wheel lock) makes it difficult for a car thief to take your car. Lojack (a tracking system) makes it easier for the police to catch the car thief who has stolen it.
- Which of these types of protection conveys a negative externality on other car owners?
- Which conveys a positive externality?
- Do you think there are any policy implications of your analysis?