Public Goods and the Risk of Free Rider Consumers

Most goods and services that are purchased are such that one person or a very limited group of persons can enjoy the consumption of the good or, for a durable good, the use of that good at a specific time. For example, if a consumer purchases an ice cream bar, she can have the pleasure of eating the ice cream bar or share it with perhaps one or two other people at most. A television set can only be in one home at any given time. Economists call such products rival goods.

In the case of rival goods, the party consuming the product is easily linked to the party that will purchase the product. Whether the party purchases the product depends on whether the value obtained is at least as high as the ...

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