6.3 Public and Private Goods

a. Define whether goods are rival and/or excludable. b. Explain how the nature of rival and/or excludable goods influences the behavior of individuals and groups.

• Private goods are rival and excludable, and public goods are non-rival and non-excludable.
• Due to the free rider problem, private individuals usually lack the incentive to produce public goods, leaving government as the only producer.
• Governments sometimes choose to produce private goods, such as educational services, and to allow free access to them.
• Some natural resources are, by their nature, non-excludable and rival and therefore open access. Private individuals inefficiently overconsume such resources.
• Enduring understanding POL-3: Private incentives can fail to account for all socially relevant considerations.