Question

In: Economics

What is exclusivity? What is rivalry? What’s a free rider?

What is exclusivity? What is rivalry?

What’s a free rider?

Solutions

Expert Solution

Many products, such as apples, are subject to consumption rivalry. Nevertheless, other products are not subject to pressure from consumption. Most people can listen to the same radio signals at once without damaging them.

Rivalry and exclusivity are related. When there is no competition in demand, there is no justification to eliminate the prospect of raising funds. Nevertheless, availability of funding does not remove competition. An apple cannot be shared with an infinite number of people. As a result, commodities subject to market competition would never become public goods.

If there is rivalry in consumption, there is every excuse to exclude it. Both private goods and consumer goods are subject to competition in terms of use. However, it is much more difficult to explicitly identify and enforce property rights for consumer goods. It is the tragedy of the commons.

The question of a free rider is the strain on a public resource generated by its use or overuse by people who don't pay their fair share for it or who don't pay anything at all. Free riders can arise in any group, large or small. Within an urban area, the City Council can consider how and how to compel suburban residents to contribute to the maintenance of their roads and sidewalks or to the safety of their police and fire services. A public radio or television station devotes airtime to fundraising in the hope of coaxing contributions from listeners who do not donate.


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