And this deterrence is an indivisible nonexcludable good
to neighbors and visitors.
Even if an innovator of a highly nonexcludable good is able to capture some share of its social value in the absence of excludability, that share will remain lower than for an otherwise equivalent innovation that may take advantage of both excludability and the alternative, nonexclusionary market mechanisms.
The first type reflects the fact that there are some highly nonexcludable goods whose development a patent system will fail to incentivize because the private returns appropriable using patents remain lower than the private costs of creation or validation of the good.
The advantage of externality theory is that it can apply to any nonexcludable good
, whether rival or nonrival, (36) including the global environmental and other common pool resources.
Consider lighthouses, which have long been regarded as a classic example of a nonexcludable good
Spillovers knowledge is a combination of a nonrivalrous and nonexcludable good
[Griliches, 1992; Cornes and Sandler, 1986].
Cornes and Sandler [1984; 1985] and others consider a contribution game where the market price of the nonexcludable good
is fixed at the zero level.
The extent to which these norms are observed in a collectively consumed, nonexcludable good
Such techniques include creating the fencing technology needed to exclude free riders (think of the walls around movie screens and theater stages), tying nonexcludable goods
to excludable goods, and such legal devices as conditioned contracts that go into legal effect only when a sufficient number of persons have agreed to pay for a particular project.
are those from which nonpayers cannot be excluded.
This aspect of the argument is crucial because the joint products model hinges on the inseparability of the excludable and nonexcludable goods
A profit cannot be gained by the private sector if it produces nonexcludable goods