Edited by William F. Shughart II and Laura Razzolini
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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