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@ James
2023-08-03 08:59:5622nd of July, 2023. 08:07 am
What are public goods?
Public good are things which benefit everyone, which are publically owned. They can be accessed by everyone , they give value to everyone, and anyones use of the good does not reduce it's value or availability to others.
Examples ; the local park, clean air, beaches (non-private), local infratructure (not tolled)
ChatGPT: 1. Non-excludability: This means that once a good is produced, no one can be excluded from using it. It's available for everyone, regardless of whether they pay for it or not. For example, think about a public park. Once it's there, anyone can enjoy it, regardless of whether they contributed to its maintenance or creation.
- Non-rivalry: This means that one person's use of the good doesn't reduce its availability for others. Again, consider the public park. If one person is using the park, it doesn't prevent others from also using it.
Four Types of Goods: There are four categories of goods in economics, based on whether the goods are excludable and/or rivalrous in consumption.
- Private goods: Private goods are excludable and rival. Examples of private goods include food, clothes, and flowers. There are usually limited quantities of these goods, and owners or sellers can prevent other individuals from enjoying their benefits. Because of their relative scarcity, many private goods are exchanged for payment.
- Common goods: Common goods are non-excludable and rival. Because of these traits, common goods are easily over-consumed, leading to a phenomenon called “tragedy of the commons. ” In this situation, people withdraw resources to secure short-term gains without regard for the long-term consequences. A classic example of a common good are fish stocks in international waters. No one is excluded from fishing, but as people withdraw fish without limits being imposed, the stocks for later fishermen are depleted.
- Club goods: Club goods are excludable but non-rival. This type of good often requires a “membership” payment in order to enjoy the benefits of the goods. Non-payers can be prevented from access to the goods. Cable television is a classic example. It requires a monthly fee, but is non-rival after the payment.
- Public goods: Public goods are non-excludable and non-rival. Individuals cannot be effectively excluded from using them, and use by one individual does not reduce the good’s availability to others. Examples of public goods include the air we breathe, public parks, and street lights. Public goods may give rise to the “free rider problem. ” A free-rider is a person who receives the benefit of a good without paying for it. This may lead to the under-provision of certain goods or services.
The funding of public goods by Quadratic funding is an interesting topic.
References
Retroactive Public Goods https://medium.com/ethereum-optimism/retroactive-public-goods-funding-33c9b7d00f0c
https://socialsci.libretexts.org/Bookshelves/Economics/Economics_%28Boundless%29/8%3A_Market_Failure%3A_Public_Goods_and_Common_Resources/8.1%3A_Public_Goods
economics #explorethis