Club good

A club good or natural monopoly good is a good that is virtually unlimited in terms of the quantity available but those who do not belong the club that provides the good can be excluded from using the good. In relation to other types of goods, it is excludable (people can be prevented from using it) but non-rivalrous (when one person uses the good it does not diminish the quantity available to other members).[1][2]

Digital downloads are an example is an example of a club good, consumers can be excluded from purchasing a digital download until they pay for it but when one consumer purchases a download, it does not decrease the amount available.

Digital TV is another example, consumers pay a subscription fee giving them access to the club and they receive the TV shows which can be sent to an infinite amount of subscribers.

See Also

Read about these other types of goods to see why a club good differs from other goods:

Excludable Non-Excludable
Rival Private good Common resource
Non-Rival Club good Public good

References

  1. M. Parkin and R. Bade. Economics: Canada in the Global Environment. Toronto: Pearson, 2013, pp. 392.
  2. A. Goolsbee, S. Levitt and C. Syverson. Microeconomics. New York: Worth Publishers, 2013, pp. 672.

Authors and Editors

Lyndon G., Celeste Pomerantz, Jason Donev
Last updated: September 17, 2016
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