Common good (economics)

Common goods (also called Common resources[1]) are defined in economics as goods that are rivalrous and non-excludable. Thus, they constitute one of the four main types based on the criteria:

  • whether the consumption of a good by one person precludes its consumption by another person (rivalrousness)
  • whether it is possible to prevent people (consumers) who have not paid for it from having access to it (excludability)
Wild fish are an example of common goods. They are non-excludable, as it is impossible to prevent people from catching fish. They are, however, rivalrous, as the same fish cannot be caught more than once.

People tend to overuse the common goods because there is no charge for using them. Accordingly policymakers use numerous strategies to restrict exploitation of common goods. Typical instances are fish in the ocean or congested non toll roads.[1]