Walking home the other day, I invented the terms “anti-rival” and “anti-excludable”. These terms are not widely used, yet sadly I do not earn coinage credit.
Many things are important and essential that are largely done by the private sector. Many things are neither important nor essential that are done by the public sector. What differentiates in which sector a good or service is provided is not essentialness, nor its importance. Rather it is its excludability and its rivalry. A good is excludable if I can charge you for it and keep you from using it if you don’t pay. A good is rivalrous if my consumption prevents yours.
Goods that are both excludable and rivalrous are classified by economists as private goods, and are often provided by the private sector. Food is both important and essential, yet most Americans get food from private vendors in the US, ranging from the local farmer’s market to the largest Big Box store.
In contrast, goods that are neither excludable nor rivalrous are categorized as public goods. The classic example is national defense, which serves me whether I want it or not, and I pay with taxes. No private firm provides a nuclear defense in case my property is invaded by a foreign army. Over-the-air broadcasting is also a public good, though it is privately provided. Anyone with a receiver can get any over-the-air channel. In that case, broadcasting is funded not by taxes but by advertising. The model is switched and the viewer is the good being sold to the advertiser, since the market for advertising on over-the-air television is both excludable and rivalrous (since time is rivalrous and the broadcaster can sell it to whomever they like for the market rate).
Goods that are excludable but not rivalrous are called club goods.
Goods that are rivalrous but not excludable are congesting or common pool resources.
The opposites of Rival and Excludable are generally taken to be Non-rival and Non-excludable. Yet, that is incomplete. Is the opposite of one zero or negative one? Hence the need for the ideas of Anti-rival and Anti-excludable.
The concept of Anti-excludability was, as far as I can tell, first defined in a blog post by Pierre de Vries
These definitions, however, don’t take into effect the network effects that have become so prevalent on the web. Social networks like amazon reviews and del.icio.us tags are not just non-rivalrous, as one would expect from knowledge; the more one uses them, the more value is created.
These goods are “anti-rivalrous”. Their use increases the amount available for consumption by others.
One can play the same game with exclusiveness. An “anti-exclusive good” might be one where the my giving it to you actively encourages you to pass it along to others. Viruses are one example; another is peer-to-peer software which someone cannot use without becoming a server node for others.
We usually think of transportation as a tangible good, but it is also often an Anti-rival or Network good, and far more valuable the more people there are, until congestion sets in.
Your consumption of bike lanes is much more a complement for mine than a substitute. Your presence increases the demand for bike lanes (and thus network coverage – through a politically intermediated process) and spreads the fixed costs of construction across more users (if it were in fact user financed, in practice it is a complement because of lobbying the government, but that’s another story).
Your consumption of transit is a complement to mine, increasing the likelihood there will be a bus on the route I want to travel, and lowering my wait time. This is dubbed the Mohring effect in transportation.
Even your consumption of driving complements mine where network density is low, ensuring there will be a road network, which I could not afford myself. In short, not only is transportation usually non-rivalrous in the long run, it is anti-rivalrous. Even in the short run, significant congestion is the exception not the rule.
But how can such a good be anti-excludable?
We hypothesize the more people who walk, the more likely the next person will be to walk, not because the network changes, but because walking invites more people to walk, the act of walking acts as an advertisement for the act of walking. Similarly for biking, riding transit, or driving a car. The more you see it, the more plausible it becomes. I feel more comfortable walking the more pedestrians there are. I feel safer walking. Every pedestrian is a reminder to drivers that there are pedestrians. Every pedestrians acts as Eyes on the Street extending the words of Jane Jacobs which she applied to local proprietors.
Filling in the Table
The northwest corner of the table below (suggested by de Vries is standard. Does it make sense to think about the remaining five cells as de Vries suggests?
Table: Types of Goods
|Rival[Congesting]||Private||Congesting or Common Pool Resource||Rally Good|
|Anti-rival [Network]||Social Network||Broadcast Media||Memetic Good|
There are five cells in the table requiring names. I hereby coin the following:
- Anti-Rival and Excludable: Social Network Good (For example, Facebook, it is excludable, but my membership makes yours more valuable)
- Anti-Rival and Non-Excludable: Media Good (For example any broadcast activity (de Vries suggests Social Tagging) but really any type of social media like Twitter)
- Anti-Rival and Anti-Excludable: Memetic Good (Perhaps Walking or Biking)
- Non-Rival and Anti-Excludable: Viral Good (For instance as per de Vries, Peer-to-Peer software)
- Rival and Anti-Excludable: Rally Good (Envision a rally on a public square (for instance to overthrow a government) which attracts protestors, but does get crowded)
In short there are some additional types of goods beyond rival/non-rival and excludable/non-excludable.
Anti-rival goods – I benefit if others use
Anti-excludable goods – I spread the use of the good to others every time I use.
Anti-rival, anti-excludable items include many ideas or memes. My possessing an idea does not prevent you from possessing it, so it is certainly non-rival. Unlike tangible property, ideas cannot be easily protected. (There are of course patents and copyrights, but those affect physical (or electronic) production, not what’s in your head). However many ideas are better if more people possess them, so we could class them as network goods, or anti-rival. Similarly many ideas are so good people want to share them. Like a juicy secret, telling someone induces it to spread more widely, making it anti-excludable.