(DP 2015-03) Completing Ostrom’s Table: A Note on the Taxonomy of Goods

Abstract

A framework is proposed to subsume public goods and common-pool resources, respectively, as specific cases of positive and negative externalities. A pure public good is a positive externality whose appropriable benefits are too small or too uncertain relative to the high private cost for anyone to produce it in any amount. The common-pool problem is a case where each agent’s action imposes a negative externality on everyone else.

JEL Codes: D61, D62, H41, H42