so what we do with this four types of goods framework is we take you know all the potential goods that exist and we coarsely divide them into four groups by two characteristics those characters characteristics are called rivalry and excludability the reason we do this and lets us think about you know what types of goods does the free market do a good job supplying and what sort of goods you know might the government need to intervene okay so first rivalry a good is said to be rival risk if one person consumption of a good automatically prevent someone else from consuming it okay so examples if I bought a new pair of shoes no one else could buy those shoes shoes are rivalries okay otherwise a good is non rivalries cable television is non rivalries if I'd get a spectrum subscription that doesn't stop anyone else from getting a subscription so that's non-rivalrous okay so food watches televisions those all those things are rival wrists but something like a Netflix subscription a movie ticket those are non robberies you might think well movie ticket well what if it was the last ticket you know in the theater but remember this this definition it's if one person consuming could automatically prevent someone else from consuming it right and so me buy a movie ticket doesn't automatically prevent anyone else from my movie so we wouldn't conserve writers even though we'd say look a movie tickets can be like congestive all no it could be they run out but we still wouldn't call movies a rival risk good for that reason okay the next one is excludability a good is said to be non-excludable if it's impossible or impractical to keep someone from benefiting the good okay so we think of things like being non-excludable something like am/fm radio is not excludable right you can't stop somebody from tuning in and in capturing those radio waves we think of things like public parks is being non-excludable like you can't stop someone from entering a public park okay a gym membership is exclude right because if you do not pay your dues they will not let you in the club right you don't you don't pay for your gym membership you walk in they'll stop you and send you out okay a you know french fries are excludable right you don't pay for those french fries you're not allowed to have them and if you try to eat them and then don't pay for him in trouble so these things are excludable it's impossible or impractical to keep someone all right sorry things are excludable are possible they're practical to keep someone from a if they're good something is not excludable if it's impossible or impractical the fish in the ocean are not excludable since it's impractical to stop some from catching the fish okay so most goods just about anything you buy in a store are both rival ris'n excludable you know most goods are rival Wriston excludable those are called private goods if you have a good that is rivalries but non-excludable it's gonna call it common good so fish in the ocean is example of a common good it's rivalries if you catch that fish no one else can catch that fish but it's really hard to stop someone from catching a fish it's gonna call those common goods goods there are non rival risks but are excludable are called Club Goods okay so that gym membership is something players like Club good right it's non-rivalrous if I get a membership at the 24-hour Fitness know down the street from my house it doesn't stop you from getting a membership there but it's excluded if I don't get the membership I can't go in if something that's both non-rivalrous and non-excludable it's called a public good so something a public good is like National Defense okay National Defense look that's an important thing right we'd want to be protected from you know potential terrorist attacks but it's non rival wrist right it's non rival heurists in that because I am being protected from a terrorist attack from abroad doesn't stop you from being protected by said terrorist attack it's non-excludable because let's say I didn't pay my taxes let's say I was a tax cheat and I never paid my taxes and years let's say the government even found out about it are they gonna stop the army from protecting me are they like okay you know you can't you can attack that house but nowhere else right of course not so it's not excludable so here's you know a table that sort of sums up and sorry if some reason why virus is not written here I don't know why that how that happened let's just plug it in real quick rival wrists so rival wrists excludable private goods food clothings cars anything you buy in the store it's a private good non-excludable and rival wrists those are called common Goods those are fish in the ocean timber conch that's an example that's in the books I like the example of public parking spaces so like public parking spaces at curb parking is not a school right it's public they don't stop anyone from parking there okay whether you pay your taxes or not you're still are gonna be able to park in those public parking spaces um but they are rival risk because the second one card is in there no one else can get it excludable mom arrives so the club Goods cable television gym memberships the toll lane like the ninety one fast track um those are all examples of club Goods right because they're excludable like think of the toll lane it's excludable right if you don't pay the toll you don't get to drive an Lane you're gonna get ticketed if you try to but it's not Lila risk because of I decided to take the fast track that doesn't mean the car beside behind me can't and then public goods those are non rivals and not excludable if you listen to the podcast about public goods if you haven't listened to it yet this is the time they should be listening to it because so well related to all we're talking about now lighthouses are a good example of a public good because they're not excludable you know oh you didn't pay your taxes you don't get to look at that light as you as your boat travels by this this this lighthouse you need to close your eyes that's obviously impractical so lighthouses are not excludable they're also non-rivalrous just because I am using that light from the White House doesn't mean you can't use that light from the lighthouse okay so if you're following along on the book it goes now into public public goods I'm actually saving that for the next the last a part 3 video right now I'm going to talk about common goods real quick the reason I'm going out of it out of order here is the common good section is actually really short public goods it's a little bit more robust so it just doesn't make sense for common goods to have its own section this is a little short for its own section so so you understand that's why I'm going out of order so common Goods so wedge somewhere between this environmental protection concept from the last chapter and public goods which is a big topic from this chapter is this conversation about common goods common goods are those things are non-excludable and Primus another example is groundwater in California so remember the drought look it's you know obviously you know we're like two years out of the worst part of the drought but remember how no dire it looked for a while there so in a free market during a drought when reservoirs are drying up and there's not much groundwater let do you think the farmers of Callan's California voluntarily used less groundwater the answer is absolutely not in fact the there's a planet podcast about this the well drilling business actually boomed in California during those drought years yeah the well drilling business that's a business and it boomed because farmers were trying their hardest to go deeper and bring up water faster and used what water they could before it was gone alright so there's this danger that the water was gonna run out so what they do pull it out faster so they could get theirs before it runs out what does this happen it makes the drought worse and makes the room water run out faster it this is called the tragedy of the Commons this is where a common good where there's a common good involved and rational profit maximizing people overuse common goods ok so if you are a professional fisherman but that's your livelihood you need to catch fish to have a living and you find out that fish stocks are depleting there's not much fish left what is the rational thing to do ok it's to get as much as the fish you can before it's gone right if you don't do it your competition will it's not like if you don't get the fish they'll come back but this accelerates the depletion because everyone knows this everyone knows that they are that they have to get it as fast as possible so what may be better for society and more efficient is to limit fishing until stocks replenish maybe you can limit the amount of time or people are allowed to fish or limit the amount of fish they're allowed to pull up you know and if you do this and just you know you know relax the amount of fish that are coming out of the ocean fish you know sort of naturally replenish themselves right they reproduce and so that's probably what's better for society and in the long run that's probably what's better for each individual fisherman so you as the fisherman you're probably better off if this happens if you're a farmer in California you're better off sort of relaxing not using too much water and wait for the rain to replenish the stocks before our wells run dry however if you know that your competition is not doing that if you know your competition is going to try to get those fish is gonna use that water then the rational thing is to try to get yours also so the free market does nothing to stop this from happening there's nothing to stop this this craze to pull out as many fish as possible this is why it's called the tragedy of the Commons okay Commons common goods this comes from what would pastoral England so hundreds of years ago you know someone ruined actually finding the hundreds probably hundred and a half years ago someone wrote this like famous story about the tragedy the Commons was the idea that this like shared pasture land would have this problem that because there was limited amount of land where you could take your your livestock to graze in those públicos condos used by everyone there was a problem over grazing and so as a result you know you'd fatten up your your livestock really quickly but then over the course the next few months you wouldn't have enough food for your livestock and if people could just you know trust everyone else and just only eat as much as they need then it wouldn't happen but because you can't trust everyone you have to get you know gotta get yours so that's it um that's it for this section um you know the question is like what do you do and so there is a good example of this is this with fishing you know there was a problem for a lot of years the overfishing of you know for example the halibut stock you know off the coast of Alaska and there was a recent plan of mo'ne podcast that talked about this and what the government did to solve this problems they instituted a fishing season where you're not allowed to fish around there's only a certain amount of years you're allowed to fish by making these rules you pretty much turn this non-excludable good into something that is excludable by not letting any fisherman go out in the ocean it's no longer not excluded we've found a way to exclude people from catching those fish you've turned into a private good okay so um I just to tell this story like that worked for a while but then you know more and more people were interested in trying to get the fish at this time during this fishing season so they kept shorting the fishing season shorting and shorting and shorting it and so eventually it got to the point that halibut fishing season was one day long there was a one day fishing season you went out cause many fish as you can went back and it was crazy and it was dangerous because they would set this date months in advance and you wouldn't know if it wasn't the worst weather in the year that day and so it turns out that it got to the point where three out of a thousand fishermen in Alaska we're dying because of this activity and so they they changed the system and now it's sort of a quota thing where you're there's a certain amount of fish you're allowed to allowed to catch doesn't matter when you catch it you can wait for good weather but that's how much you're allowed to catch during here okay tune in for last one about public 'its you