Market Failure due to Nonexcludability
A second instance of market failure arises where consumption is rival but exclusion thought appropriate is not feasible. Whereas most goods which are rival in consumption also lend themselves to exclusion, some rival goods may not do so. Consider, for example, travel on a crowded cross-Manhattan street during rush hours. The use of the available space is distinctly rival and exclusion (the auctioning off or sale of the available space) would be efficient and should be applied. The reason is that use of crowded space would then go to those who value it most and who are