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Public Goods

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Encyclopedia of Law and Economics

Definition

A public good is a good that simultaneously features both nonexcludability and nonrivalry in consumption.

Delimitation and Examples

A pure public good is a good that simultaneously features both nonexcludability and nonrivalry in consumption. Nonexcludability implies that excluding individuals from making use of the good is prohibitively costly, such that all individuals can benefit from the provision of the good. Nonrivalry means that the consumption of the good by one individual does not reduce the consumption possibilities of other individuals. Classic examples include national defense or a lighthouse. In contrast, a private good is characterized by both excludability and rivalry in consumption. For example, if an apple is consumed by one individual no other individual can make use of the apple. In addition, excluding other individuals from the benefits of the apple is associated with only minor costs. There are also goods that show rivalry in consumption but...

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Author information

Authors and Affiliations

  1. Public Economics Group, Philipps-University Marburg, Marburg, Germany

    Tim Friehe

  2. Center for Advanced Studies in Law and Economics (CASTLE), University of Bonn, Bonn, Germany

    Florian Baumann

Authors
  1. Tim Friehe
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  2. Florian Baumann
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Corresponding author

Correspondence to Tim Friehe .

Editor information

Editors and Affiliations

  1. MRE and University of Montpellier, Montpellier, France

    Alain Marciano

  2. Faculté d’Economie, Université de Montpellier and LAMETA-UMR CNRS, Montpellier, France

    Alain Marciano

  3. DiGSPES, University of Eastern Piedmont, Alessandria, Italy

    Giovanni Battista Ramello

  4. IEL, Torino, Italy

    Giovanni Battista Ramello

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Friehe, T., Baumann, F. (2019). Public Goods. In: Marciano, A., Ramello, G.B. (eds) Encyclopedia of Law and Economics. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-7753-2_393

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