I'd add (2a), due to zero-sum games. This is frequent in competitive situations; I buy something (e.g. advertising) to get ahead, and now you have to buy it too just to keep competing. Then you buy more of it, and I have to buy as well. And since effects of each purchase get cancelled out by other party's purchase, everyone is back where they started. In a perfectly abstract way, there's no externality here - though in practice, anything you buy involves some externalities, so you have them here too, in addition to wasting mine and yours and other competitor's money.

It's a trench warfare.

> It is true that these problems are unavoidable in a free market. However, outside intervention does not, in general, solve them. In fact it almost always makes it worse, because whoever is making the outside intervention has even less at stake in the choices about what to "vote with money" for than the people making those choices.

Can't agree with that. Free market by itself is neither willing, nor in a position to, account for externalities. Also, you could group (2), (2a), and couple other similar things under the general label of "coordination problems", i.e. things that look like iterated prisoner's dilemma if you squint. For that, the best solution involves an outside party unilaterally establishing accepted rules of behaviour, forcing cooperation instead of defection.

> I think the best we can do is to try to give people the best tools we can for making their own choices, not trying to dictate those choices by outside intervention.

Again, this is how we get into coordination problems. This solves (1), but really causes (2).