Why is a firm a public good?
"Even in the production of private commodities, there can be an important public good
aspect in the production process itself."
-all benefits, all contributes
-you contribue to the wellbeing of the community, which effects everyone
Production: joint activity
-motivates by self-interest, but the success of the production is shared by the
organization, the community
-there are many many stakeholders involved, acting responsiblely
Tragedy of the commons: the rational and independent act of individual interest, benfits,
contrary to the group's long term best interest.
-ex: fish man: fish more than they wanted to, than the quota let them to. Over fishing
benifits the fish man according to their self-interest, but if everyone acts on this kind of
self-interest, eventually it harms the group, the environment's long term best interest.
"how the cake is divided influences the size of the cake itself"
-the size of the cake depends on how people want to benifits on it
-one simple production act can influence on social wellbeing and so on, that can not be
its initial intention
-ex: Walmart: it effects how they work