Public Goods
A public good is non-rival and non-excludable: one person’s use does not subtract from another’s, and you cannot cheaply keep free-riders out — so private markets under-provide it.
Definition
Samuelson: efficient provision sets the sum of marginal rates of substitution to marginal cost. Defense, basic research, and (arguably) financial stability are public-good-like. Club goods and common-pool resources are neighbors, not synonyms.
Why it matters
Regulation, CCPs, and data standards get funded as public goods or they do not get funded. A desk that free-rides on others’ due diligence is in the model.
Case
Market-wide circuit breakers and central-bank lender-of-last-resort are public-good provision. A single bank will not buy ‘system stability’ on its own.
How to read it
Test rivalry and exclusion. If the good is rival, it is not public — it may be a commons. Wrong label, wrong tool.