Rivalry

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Description

Paul Romer:

"Economists studying public finance have identified two fundamental attributes of any economic good: the degree to which it is rivalrous and the degree to which it is excludable. Rivalry is a purely technological attribute. A purely rival good has the property that its use by one firm or person precludes its use by another; a purely nonrival good has the property that its use by one firm or person in no way limits is use by another. Excludability is a function of both the technology and the legal system. A good is excludable if the owner can prevent others from using it. A good such as the code for a computer program can be made excludable by means of a legal system that prohibits copying or by means of encryption and copy protection schemes." (http://artsci.wustl.edu/~econ502/Romer.pdf)


Discussion

Patrick Anderson, remark in the context of User Owned theory:

"A consumer pays Price Above Cost whenever there is real or artificial rivalry.

Rivalry is 'real' when a product is scarce even after all effort has been toward increasing abundance.

Rivalry is 'artificial' when a product is scarce because of actions by owners to decrease abundance.

Artificial rivalry can be held in place when consumers do not know how to organize and own the Physical Sources of production themselves. A User Owned organization does not employ artificial rivalry unless they are acting against new users that are not yet owners - and in that case they are not a true User Owned company."

More Information

  1. Related: Abundance vs. Scarcity
  2. Nonrival