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In economics, a public good (also referred to as a social good or collective good) [1] is a good that is both non-excludable and non-rivalrous. Use by one person neither prevents access by other people, nor does it reduce availability to others. [1] Therefore, the good can be used simultaneously by more than one person. [2]
A good, service or resource that is unable to prevent or exclude non-paying consumers from experiencing or using it can be considered non-excludable. An architecturally pleasing building, such as Tower Bridge , creates an aesthetic non-excludable good, which can be enjoyed by anyone who happens to look at it.
A hammer is a durable rival good. One person's use of the hammer prevents others from using the hammer at the same time. However, the first user does not "use up" the hammer, meaning that some rival goods can still be shared through time. An apple is a nondurable rival good: once an apple is eaten, it is "used up" and can no longer be eaten by ...
Something is non-excludable if its use cannot be limited to a certain group of people. Again, since one cannot prevent people from viewing a firework display it is non-excludable. [9] Due to these constraints, one of few examples of a "pure public good" is national defense - it is both non-rivalry and non-excludable.
Road is public good whenever there is no congestion, thus the use of the road does not affect the use of someone else. However, if the road is congested, one more person driving the car makes the road more crowded which causes slower passage. In other words, it creates a negative externality and road becomes common good. [1]
A private good is defined in economics as "an item that yields positive benefits to people" [1] that is excludable, i.e. its owners can exercise private property rights, preventing those who have not paid for it from using the good or consuming its benefits; [2] and rivalrous, i.e. consumption by one necessarily prevents that of another.
In social science, the free-rider problem is the question of how to limit free riding and its negative effects in these situations, such as the free-rider problem of when property rights are not clearly defined and imposed. [4] The free-rider problem is common with public goods which are non-excludable [b] and non-rivalrous.
In traditional usage, a pure global public good is a good that has the three following properties: [2] It is non-rivalrous. Consumption of this good by anyone does not reduce the quantity available to other agents. It is non-excludable. It is impossible to prevent anyone from consuming that good. It is available more-or-less worldwide.