Private vs Public Goods

Rivalrous & Excludable	Excludable	Non-Excludable
Rivalrous	Private Goods like food, clothing, cars, personal electronics	Common Goods like fish stocks, timber, coal
Non-Rivalrous	Club Goods like cinemas, private parks, TV	Public Goods like air, national defense

Rivalrous & Excludable

Excludable

Non-Excludable

Rivalrous

Private Goods

like food, clothing, cars, personal electronics

Common Goods

like fish stocks, timber, coal

Non-Rivalrous

Club Goods

like cinemas, private parks, TV

Public Goods

like air, national defense

Private Goods

Most private goods are:

Excludable - you can exclude people who don’t pay for it.

Rival in consumption - one person can consume. Once it’s used, it’s used.

Public Goods

The Government

Because most things funded by the government are non-excludable and non-rivalrous, there’s no reason to create competition. If there’s no competition, there’s no reason for it to innovate.

Note