Rivalry (economics): Difference between revisions

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In economics, a good is considered either rivalrous (rival) or nonrival. Rival goods are goods whose consumption by one consumer prevents simultaneous consumption by other consumers^[1]. Most goods, both durable and nondurable, are rival goods. A hammer is a durable rival good. One person's use of the hammer presents a significant barrier to others who desire to use that hammer at the same time. However, the first user does not "use up" the hammer, meaning that some rival goods can still be shared through time. An apple is a nondurable rival good: once an apple is eaten, it is "used up" and can no longer be eaten by others. Non-tangible goods can also be rivalrous. Examples include the ownership of radio spectrums and domain names. In more general terms, almost all private goods are rivalrous.

In contrast, nonrival goods may be consumed by one consumer without preventing simultaneous consumption by others. Most examples of nonrival goods are intangible. Broadcast television is an example of a nonrival good; when a consumer turns on a TV set, this does not prevent the TV in another consumer's house from working. The television itself is a rival good, but television broadcasts are nonrival goods. Other examples of nonrival goods include a beautiful scenic view, national defense, clean air, street lights, and public safety (police and law courts).

More generally, most intellectual property is nonrival. In fact, certain types of intellectual property paradoxically increases value, the more other people use it. For example, the more people using a particular programming language, the more valuable that language becomes.

Goods that are non-rival are goods that can be enjoyed simultaneously by an unlimited number of consumers. Goods that are both nonrival and non-excludable are called public goods. It is generally accepted by mainstream economists that the market mechanism will not provide public goods, so these goods have to be produced by other means, including government provision.

Classifications

	Excludable	Non-excludable
Rivalrous	Private goods eg. food, clothing, parking spaces	Common-pool resources eg. fish stocks, timber
Non-rivalrous	Club goods eg. cinemas, software, private parks	Public goods eg. free-to-air television, air, national defense

References

^ David L.Weimer. Policy Analysis: Concepts and Practice. Pearson: Prentice Hall. p. 72. ISBN 013183001-5. Fourth Edition. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)

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[1] David L.Weimer. Policy Analysis: Concepts and Practice. Pearson: Prentice Hall. p. 72. ISBN 013183001-5. Fourth Edition. {{cite book}}: Unknown parameter |coauthors= ignored (|author= suggested) (help)

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 More generally, most [[intellectual property]] is nonrival. In fact, certain types of intellectual property paradoxically increases value, the more other people use it. For example, the more people using a particular programming language, the more valuable that language becomes.
-Goods that are non-rival are goods that can be enjoyed simultaneously by an unlimited number of consumers. Goods that are both nonrival and [[Non-excludable good|non-excludable]] are called [[public good]]s. It is generally accepted by mainstream economists that public goods should be provided by the government, as the free market will not provide these goods.
+Goods that are non-rival are goods that can be enjoyed simultaneously by an unlimited number of consumers. Goods that are both nonrival and [[Non-excludable good|non-excludable]] are called [[public good]]s. It is generally accepted by mainstream economists that the market mechanism will not provide public goods, so these goods have to be produced by other means, including government provision.
 == Classifications ==