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The Elgar Companion to Public Choice

The Elgar Companion to Public Choice

Elgar original reference

Edited by William F. Shughart II and Laura Razzolini

This authoritative and encyclopaedic reference work provides a thorough account of the public choice approach to economics and politics. The Companion breaks new ground by joining together the most important issues in the field in a single comprehensive volume. It contains state-of-the-art discussions of both old and contemporary problems, including new work by the founding fathers as well as contributions by a new generation of younger scholars.  

Chapter 16: Clubs and club goods

Gary M. Anderson, William F. Shughart II and Robert D. Tollison

Subjects: economics and finance, public choice theory, politics and public policy, public choice


Gary M. Anderson, William F. Shughart II and Robert D. Tollison* 1 Introduction Club goods occupy the middle ground between private goods and public goods. Whereas private goods are both rivalrous and excludable, pure public goods are neither. Private provision and collective consumption mean that club goods are a little of both. On the one hand, only those individuals who want to consume a good in a club setting and are willing to finance its provision join; others can be excluded from enjoying the benefits of the club at relatively low cost. On the other hand, club goods are subject to crowding, and this rivalry in consumption limits the number of people who want to become club members. Nonetheless, the provision of a collective good in the setting of a private club has all the problems attending public goods production, such as truthful preference revelation and free riding, which must be handled simultaneously with the problem of determining the optimal club size. In effect, individuals must optimize both output and group size simultaneously in the theory of clubs. A pure public good in the Samuelsonian sense is a polar case of the theory of clubs in which the optimal group size is allinclusive. So, technically at least, the theory of clubs deals with so-called ‘impure’ public goods, which are not equally and costlessly available to all users. This chapter assesses the empirical relevance and applicability of the theory of clubs. This is not an easy task because there has...

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