When the actions of one player affect the environment of another player, we say that there are externalities. In economics, two types of externalities are often discussed: consumption and production externalities. The former externality describes a situation where a player’s utility function is directly affected by another player’s actions (playing loud music). The latter describes a situation where the production function of a player is directly affected by another player’s actions (polluting). Externalities may arise in economies through public goods, common-pool resources, technological spillover, strategic interactions, and so on.