| Definition |
Goods that are non-excludable and non-rivalrous, meaning one person's use doesn't reduce availability to others. |
Goods that are both excludable and rivalrous, meaning consumption by one reduces availability for others. |
| Excludability |
Cannot exclude anyone from using them. |
Can exclude non-payers from usage. |
| Rivalry |
Non-rivalrous; one person’s use doesn’t affect another’s. |
Rivalrous; one person’s use reduces availability for others. |
| Consumption |
Simultaneously consumed by many without depletion. |
Consumed individually; limited by quantity. |
| Pricing |
Difficult to price due to free rider problem. |
Priced and sold in markets based on demand and supply. |
| Provision |
Usually provided by the government or funded by taxpayers. |
Provided by private firms for profit. |
| Free Rider Problem |
Yes, people can benefit without paying. |
No, only paying customers can consume. |
| Examples |
National defense, public parks, street lighting. |
Food, clothing, cars, smartphones. |
| Market Failure |
Common due to under-provision and non-payment. |
Markets function efficiently with proper pricing. |
| Ownership |
Generally owned collectively or by the state. |
Owned by individuals or private entities. |
| Access |
Available to all without direct payment. |
Only accessible to those who purchase them. |
| Regulation Need |
Requires regulation or public provision to ensure availability. |
Minimal regulation; governed by market competition. |
| Utility |
Provides collective utility to society. |
Provides personal utility to individual consumers. |
| Scarcity |
Less affected by scarcity due to non-rivalry. |
Subject to scarcity and competition. |
| Funding |
Primarily funded through taxes or donations. |
Funded through direct consumer purchases. |
Public Goods vs Private Goods