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The Free Rider Problem and the Tragedy of the Commons definitions

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  • Public Good
    A resource that is accessible to all, with usage by one not diminishing availability to others and no one can be prevented from using it.
  • Non-Rivalry
    A characteristic where consumption by one individual does not reduce the amount available for others.
  • Non-Excludability
    A feature where it is impossible or impractical to prevent anyone from accessing a resource.
  • Free Rider Problem
    A situation where individuals benefit from a resource without contributing to its cost, leading to under-provision.
  • Marginal Benefit
    The additional value gained by society from consuming one more unit of a resource or good.
  • Marginal Cost
    The extra expense incurred to provide one more unit of a resource or good.
  • Taxation
    A compulsory payment imposed by government to fund public goods and overcome under-supply.
  • Common Resource
    A resource that is available to all, but usage by one reduces availability for others, and access cannot be restricted.
  • Rivalry
    A property where consumption by one individual diminishes the amount available for others.
  • Tragedy of the Commons
    A scenario where overuse and depletion occur because individuals act in self-interest with no restriction on access.
  • Externality
    A cost or benefit affecting others that is not reflected in the decision-maker's expenses or gains.
  • Property Rights
    Legal or social arrangements that assign ownership and control over resources, enabling better management.
  • Market Equilibrium
    The point where supply and demand intersect, determining the quantity and price in a market.
  • Efficient Quantity
    The level of resource use that maximizes overall societal welfare, accounting for all costs and benefits.
  • Negative Externality
    A harmful effect on society from an individual's actions that is not included in private costs.