Why are club goods excludable but still non-rivalrous?

Club goods are excludable but non-rivalrous because they can restrict access to those who pay, but one person's use doesn't diminish availability for others.

Club goods, also known as artificially scarce goods, are a type of good in economics that are excludable but still non-rivalrous. This means that access to these goods can be limited or restricted to a certain group of people, usually those who are willing to pay for them, hence they are excludable. However, the consumption of these goods by one individual does not reduce the amount available for consumption by others, making them non-rivalrous.

The concept of club goods can be better understood with an example. Consider a private park that charges an entry fee. The park's management can exclude those who do not pay the fee, making it an excludable good. However, one person's enjoyment of the park does not significantly reduce the ability of others to enjoy it as well, making it non-rivalrous. This is because the park has a large capacity and one person's use does not prevent others from using it.

Another example could be a subscription-based streaming service like Netflix. The service can exclude those who do not pay the subscription fee, but one person watching a show does not prevent others from watching the same show. This is because the digital nature of the service allows for unlimited simultaneous streams of the same content.

In contrast, public goods are non-excludable and non-rivalrous, meaning they are available for everyone to use and one person's use does not reduce availability for others. Examples include public parks and street lighting. On the other hand, private goods are both excludable and rivalrous, meaning they can be restricted to those who pay and one person's use reduces availability for others. Examples include food and clothing.

In conclusion, club goods are a unique type of good in economics that are excludable but still non-rivalrous. This characteristic allows for the creation of business models that can generate revenue by charging for access while still providing the good to a large number of people.