Public Goods

In economics, a public good is a good that is non-excludable and non-rivalrous. This means that once the good is provided, no one can be excluded from using it, and one person's use of the good does not diminish the availability of the good for others.

Examples of Public Goods

Public goods are often provided by the government because they are difficult for private companies to provide profitably. Some examples of public goods include:

• Street lighting
• National defense

Free-rider Problem

One problem with public goods is the free-rider problem. If a public good is provided, people can benefit from it without paying for it. This creates an incentive for people to not pay for the good, and instead rely on others to pay for it. This can lead to under-provision of the public good, as not enough people are willing to pay for it. One solution to the free-rider problem is government provision of the public good, funded through taxes.

Tragedy of the Commons

Another problem with public goods is that they can be subject to the tragedy of the commons. This occurs when a public good is overused or exploited because individuals are acting in their own self-interest. One solution to the tragedy of the commons is government regulation of the use of the public good, to prevent overuse or exploitation.

Conclusion

Overall, public goods are important for society, but they can be difficult to provide efficiently. Governments have a role to play in providing and regulating public goods to ensure that they are provided efficiently and fairly.

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