Public Goods and Common Resources

A public good is non-excludable, meaning no one can be effectively prevented from using it once it exists, and non-rivalrous, meaning one person's use does not reduce how much is available for anyone else, like national defense or a public fireworks display; because people can benefit from a public good without paying for it, a problem called free-riding, private markets tend to underprovide it, and government often steps in to fund it instead. A common resource is non-excludable but rivalrous, like an ocean fishery, so it faces a real risk of overuse, since one person's use directly reduces what remains for everyone else, a problem sometimes called the tragedy of the commons.

This explanation is AI-generated and can occasionally be wrong. 🚩 Report