ABSTRACT
The blanket use of the term, however, obscures important differences among the variety of public goods in terms of the nature of the market failure and, consequently, the appropriate public policy response. One of the most important public goods in modern societies is the generally available stock of information that is valuable in production, consumption, or exchange. The northwest (NW) cell defines private goods, characterized by both rivalry in consumption and excludability in use shoes, books, bread, and the other things we commonly purchase and own. Excludability implies that some individual can exclude others from use of the good. In most public policy contexts in developed democracies, power to exclude others from use of a good is dependent on property rights granted and enforced by the state and its organs. The presence of nonrivalry, nonexcludability, or congestion arising from changes in levels of demand can lead to the failure of markets to achieve Pareto efficiency.
