Club Good

… a core concept in Economic Analysis and Atlas102

Click for MRU video

Click for MRU video

Concept description

A club good is an excludable but non-rival good. See Excludable Good and Non-rival Good.

Alex Tabarrok (reference below, video on right) explores how markets provide club goods such as cable TV.

Tabarrok says:

“Club goods are non-rival and excludable. 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 (non-rival). Entrepreneurs are always looking for ways to turn public goods into club goods – cable TV and satellite radio being two examples. Some entrepreneurs have even figured out how to profit from providing public goods – for instance, radio and broadcast television are public goods, but, thanks to advertising, they are profitable.”

ClubGoodsHe notes that some club goods, such as Wi-Fi are provided in a number of ways:

  • through subscription, by a cable or phone company, where non-subscribers are excluded
  • for free, by coffee shops as a way of attracting customers
  • for free by some providers if you watch ads
  • for free, by some public institutions, as a public good
Practice questions

From http://www.mruniversity.com/node/313600, accessed 10 May 2016.

Atlas topic, subject, and course

Public Goods and Commons Problems (core topic) in Economic Analysis and Atlas102 Economic Analysis.

Source

Alex Tabarrok, Club Goods (5-minute video), Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/club-goods-examples, accessed 10 May 2016.

Page created by: Ian Clark, last modified 109 May 2016.

Image: Alex Tabarrok, Minute 0:15 of Club Goods (5-minute video), Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/club-goods-examples, accessed 10 May 2016.