Rivalry (economics)
In
A good can be placed along a continuum from rivalrous through non-rivalrous to anti-rivalrous. The distinction between rivalrous and non-rivalrous is sometimes referred to as jointness of supply or subtractable or non-subtractable.[3] Economist Paul Samuelson made the distinction between private and public goods in 1954 by introducing the concept of nonrival consumption. Economist Richard Musgrave followed on and added rivalry and excludability as criteria for defining consumption goods in 1959 and 1969.[4]
Rivalry
Most
Non-rivalry
In contrast, non-rival goods may be consumed by one consumer without preventing simultaneous consumption by others. Most examples of non-rival goods are intangible.
Non-rivalry does not imply that the total production costs are low, but that the marginal production costs are zero. In reality, few goods are completely non-rival as rivalry can emerge at certain levels. For instance, use of public roads, the Internet, or police/law courts is non-rival up to a certain capacity, after which congestion means that each additional user decreases speed for others. For that, recent economic theory views rivalry as a continuum, not as a binary category,[5] where many goods are somewhere between the two extremes of completely rival and completely non-rival. A perfectly non-rival good can be consumed simultaneously by an unlimited number of consumers.
Anti-rivalry
Goods are anti-rivalrous and inclusive if the consumer’s enjoyment increases with how many others consume the good. The concept was introduced by Steven Weber (2004), saying that when more people use free and open-source software, it becomes easier and more powerful for all users.[6] Lessig noted that any natural language is anti-rivalrous, because its utility increases with how much it's used by others.[7] Cooper noted that efforts to combat climate change are perversely anti-rivalrous, because the US will benefit from the efforts of others to combat this problem, even if it refuses to do so.[8]
Types of goods based on rivalry in consumption and excludability
See also
- The generalized network effect of microeconomics.
- Metcalfe's law
- Anti-rival good
- Rent-seeking
- Free-rider problem
References
- ISBN 0-13-183001-5. Fourth Edition.
- ^ Cornes, R., T. Sandler. 1986. The theory of externalities, public goods, and club goods. Cambridge University Press.
- ^ Hess, C., E. Ostrom. 2006. Introduction. C. Hess, E. Ostrom, eds. Understanding Knowledge as a Commons: From Theory to Practice. The MIT Press, Cambridge, Massachusetts
- S2CID 6738663– via SAGE journals.
- ^ Leach, J. 2004. A course in public economics. Cambridge University Press: 155–56
- Wikidata Q54641592..
- Wikidata Q104836676..
- Wikidata Q63090519..