Externalities and the possibility of pareto- satisfactory decentralization

This paper shows that the (New)² Welfare Economics provides interesting new ways of classifying externalities in terms of the complexity of messages required to equate equilibria and optima; and in which, at the end, it is shown that the study of externalities provides useful new insights into the (New)² Welfare Economics by showing problems with the definition of satisfactory informationally decentralized resource allocation mechanisms.