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A model to teach non-rival and excludable goods in undergraduate microeconomics

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  • Wood, Aaron D.

Abstract

Non-rival and excludable goods, often referred to as artificially-scarce goods or club goods, are discussed in principles of microeconomics textbooks, but they are not given a rigorous graphical analysis. This paper presents a model for non-rival and excludable goods that aligns with the intuition conveyed in introductory microeconomics textbooks. The model enables students to develop a rigorous understanding of the theory of non-rival and excludable goods, and it includes an allocatively efficient outcome, a private outcome, and a second-best solution outcome to exhibit the relative prices, quantities, profits, and welfare results that emerge in different regulatory frameworks. A numerical exercise solidifies the concepts presented in the theoretical model.

Suggested Citation

  • Wood, Aaron D., 2017. "A model to teach non-rival and excludable goods in undergraduate microeconomics," International Review of Economics Education, Elsevier, vol. 24(C), pages 28-35.
    • Handle: RePEc:eee:ireced:v:24:y:2017:i:c:p:28-35
    DOI: 10.1016/j.iree.2016.12.001
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    References listed on IDEAS

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    1. Daron Acemoglu & Asuman Ozdaglar & Alireza Tahbaz-Salehi, 2017. "Microeconomic Origins of Macroeconomic Tail Risks," American Economic Review, American Economic Association, vol. 107(1), pages 54-108, January.
    2. Todd Sandler & John Tschirhart, 1997. "Club theory: Thirty years later," Public Choice, Springer, vol. 93(3), pages 335-355, December.
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