A model to teach non-rival and excludable goods in undergraduate microeconomics. (January 2017)

• Record Type: Journal Article
• Authors: Wood, Aaron D.
• Is Part Of: International review of economics education. Volume 24(2017:Jan.)
• Page Start: 28
• Page End: 35
• Publication Date: 2017-01
• Subjects: A22 -- D21 -- L51; Artificially-scarce goods -- Club goods -- Economics education -- Principles of microeconomics -- Firm theory -- Regulation; Economics -- Study and teaching -- Periodicals; Economics -- Study and teaching; Periodicals; 330.0711
• DOI: 10.1016/j.iree.2016.12.001
• Languages: English
• ISSNs: 1477-3880

Abstract

Graphical abstract: Highlights: A model to teach non-rival and excludable goods in undergraduate microeconomics is presented. The model teaches theory and regulation for non-rival and excludable goods. A numerical exercise is included for use in the classroom. 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.