Acton Institute PowerBlog

Why entrepreneurs want to turn public goods into club goods

Note: This is post #62 in a weekly video series on basic microeconomics.

Club goods are goods that are nonrival and excludable, says economist Alex Tabarrok. For instance, HBO is a club good, as you need to pay a monthly fee to access HBO (excludable) but more viewers does not add to costs (nonrival). As Tabarrok explains in this video by Marginal Revolution University, entrepreneurs are always looking for ways to turn public goods into club goods.

(If you find the pace of the videos too slow, I’d recommend watching them at 1.5 to 2 times the speed. You can adjust the speed at which the video plays by clicking on “Settings” (the gear symbol) and changing “Speed” from normal to 1.25, 1.5 or 2.)

Previous in series: Public goods and the problems of free-riders and forced-riders