Public And Private Goods, Natural Resources and Monopolies
Rival
multiple consumers cannot consume the same good
Non-Rival
multiple consumers can consume the same good
Excludable
consumption can be detected and prevented by producer

Private Goods


Efficiently produced and allocated by markets
  • agriculture, minerals, artifacts
  • labor, services
  • land parcels
  • rain and sunlight incident on land parcels

Club Goods ("Natural Monopoly")


High fixed costs, low marginal costs => inefficient competition
  • roads, bridges, tunnels (uncongested)
  • pipes: water, sewage, gas
  • wires: telecom, electricity
  • aggression deterrence (police/courts)
  • fire protection
Non-Excludable
consumption cannot be detected or prevented

Common Goods ("Natural Resources")


Tragedy of the commons, negative externalities => overconsumption
  • atmosphere, ozone layer, sky (cf. light pollution)
  • oceans, lakes, rivers, streams, groundwater, aquifers
    • both as water sources and as sinks for pollution/carbon/runoff/silt
  • fisheries, wild game, ecosystems
  • unenclosed timber and grazing land
  • underground oil/gas reservoirs; seabed minerals
  • electromagnetic spectrum; orbits

Public Goods


Free riders, positive externalities => underproduction
  • national defense
  • prevention of contagion, conflagration, flood
  • streets, parks (uncongested)
  • lighthouses, streetlights, radio/TV broadcasts, GPS, fireworks
  • knowledge, inventions, software, music, jokes, styles, designs, recipes
  • anti-poverty safety net (if most people favor charity)

Further Reading

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