Excludability
In economics , excludability refers to the property of a good that consumers or companies can be excluded from using it. Exclusivity is necessary so that a price or - in the case of a state offer - a fee can be enforced for a good .
A lack of excludability could lead to market failure due to the free rider problem . Occasionally it happens that a (private) offer comes about without being excluded, for example when income can be generated on secondary markets (advertising on the radio, donations). In this case, non-excludability is not to be understood as a “deficiency”, but as a desired property of a good. For political reasons, the exclusion is often waived, for example in the case of merit goods . A distinction is made between economic, technological, institutional, normative reasons on the basis of which others are excluded from consumption.
For reasons of welfare theory, a higher degree of Pareto efficiency could be achieved by dispensing with an exclusion . Since public goods are characterized by the fact that joint, non-rival consumption is possible, and the inclusion of additional users causes marginal costs of zero, a higher level of benefit could be achieved. Foregoing consumption by excluding consumption would mean choosing a state of lower Pareto efficiency.
Goods that can be excluded are called private goods . If they are also exposed to a rivalry between users in terms of consumption, they are private goods. If this principle of rivalry does not apply, one speaks of a public good, sometimes also called club good . The degree of exclusion is used to differentiate between the goods .