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This two pillars (non-excludability and non-rivalry) approach is very
common,
but in teaching I lean harder on one pillar, non-rivalry. This is because
public goods are generally thought of as a species of market failure. Not
including cases of non-rivalry where we have excludability therefore seems
to
imply that the market provision is hunky-dory here. But if I manage to find
a
technology which allows excluding non-paying ships from the light of my
lighthouse, so as to make it a profitable venture for me to produce it, it
is still inefficient to charge above the marginal cost of zero. (Not to
mention the deadweight nature of the costs of inventing such a
technology!) It is especially important in this so-called "age of
information" to make sure people understand the inefficiency of charging
for the provision of non-rivalrous goods.
Kevin Quinn
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