I'm reading Png & Hui on the economics of privacy. (http://18.104.22.168/eps/io/papers/0505/0505007.pdf great review article). Can someone explain the difference between direct and consequential externalities to me? as in:
"Generally, in competitive settings, an improvement in the accuracy of productive personal information may lead the less informed party (seller or employer) to include more or exclude some marginal persons (consumers or workers). This is a consequential externality on some members of the better-informed side of the market. The consequential externality might be positive or negative. "