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Learning Journal

Design and Economics

1st July 2018

Goods can be classified by their consumption rivalry and ability to exclude non- players. We have learned the classification of goods by their rivalry and excludability in the lecture. Diagram 3 presents the categories of goods. Food, clothing, and car are private goods that can be consumed by only one person and by payment. Fish in the open sea and public waterways are commons goods that can be consumed by only oneperson, but consumers don’t pay. Cable television and music in iTunes are low- congestion goods that consumers can only use it after payment, but they can be consumed by as many people as the technology allows. The fourth classification of goods is public goods, like the law and search engine, which are shared by many people and no one gets charged.

I am curious if there is an example can fit in all the four quadrants that are rivalrous/excludable, non-rivalrous/excludable, rivalrous/non-excludable and non- rivalrous/non-excludable. I haven’t found a specific good or service that can be in allcategories. However, in most situation, a system consists of all kinds of goods. For example, the hotel. People consumed the private room, public waterways, WIFI, beautiful view, sunshine, and many other kinds of offerings when living in it. To managing value creation, the hotel manager must put forward good ideas to organize all the resources and cost. Especially for the commons goods, it is changeling to control the use and transfer.

 Categories of Goods: Rivalry and Excludability

Source: the Aquarian Agrarian



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