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Rivalry

Overview Description

Rivalry, according to economists, is the incapability of multiple consumers to use the same good. Economics divide goods into two broad ways; rivalrous (rival) and nonrival goods. A rival good is the kind of good that if one consumer consumes it, it will prevent concurrent consumption by other consumers.

Rival goods

A lot of goods that fall in both the durable and non-durable goods are rivalrous or rival goods. A rival good can be nondurable where once consumed its destroyed completely, thus only one user can enjoy it; or durable where it is usable after being consumed the first time. The users will use the durable goods once a time.

For instance, a hacksaw is a durable, rival good whereby one individual’s use of the hacksaw posts a significant barrier to all others who may wish to use the same hacksaw at the same time. Conversely, when the hacksaw is used the first time, it is not ‘used up’ or destroyed in anyway. This means that the hacksaw, together with some other rival goods can still be shared over time.

Another illustration of rival goods is a melon or a cup of coffee, which are both nondurable rival goods. Once you eat a melon, it’s ‘used up’ completely, and the same piece of melon cannot be eaten by other individuals. A cup of coffee on the other hand is perishable and can only be used once by a single consumer and there would be nothing left for another user of the same. It is therefore right to say that all private and non-tangible goods are rival goods.

Rival goods create huge competitions amongst consumers in an attempt to obtain them. This is because they can only be occupied, or used by one person at a time. A very good example is a skateboard, which is a durable rival good. It can only be used by other consumers, one at a time, once the current consumer is done with it.

Nonrival goods

Contrariwise, nonrival goods are those that can be consumed by a single consumer, without preventing any simultaneous consumption by other consumers; in other words, they are the kind of goods in the market that can be enjoyed concurrently by unlimited number of consumers. Non-excludable and nonrival goods are generally referred to as public goods.

Examples of nonrival goods, wherein most of them fall in the category of intangible goods are; a Television – is a perfect example of a nonrival good in that when a consumer is watching in one location, it does not prevent another consumer of the same product from watching. The nonrival good here is the TV service and not the TV itself.

Almost all public goods are nonrival non-excludable goods that assist almost every citizen. Since public goods are non-excludable, they tend to be under produced. Sensibly, an economy’s pricing system cannot force end users to reveal their demand for only non-excludable goods and as a result, producers cannot be forced to produce enough to meet that demand.

Application of excludability and rivalry

Excludability and rivalry describe for the government or economy, the kind of goods they should manage or provide for consumers. Excludability is the capability of producers to project and thwart uncompensated consumption of their products. A jurisdiction ought to produce pure public goods. These are non-excludable goods that aren’t provided by nature. Examples of such goods are broadcasting, landscaping, education, arts etc. A jurisdiction is not required to produce impure public goods. A private good on the other hand is supplied and managed efficiently by the market as compared to how the government can handle it.

Tags: Economics, government, market

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