Club good

A noncongested toll road is an example of a club good. It is possible to exclude someone from using it by simply denying them access but it is not a rival good since one person's use of the road does not reduce its usefulness to others.

Club goods (also artificially scarce goods, toll goods or quasi-public goods) are a type of good in economics, that are excludable (unlike public goods) but non-rivalrous, at least until reaching a point where congestion occurs. These goods exhibit high excludability, but at the same time low rivalry in consumption. Thus, club goods have essentially zero marginal costs and are generally provided by what is commonly known as natural monopolies. Furthermore, club goods have artificial scarcity. Club theory is the area of economics that studies these goods. One of the most famous provisions was published by Buchanan in 1965 "An Economic Theory of Clubs," in which he addresses the question of how the size of the group influences the voluntary provision of a public good and more fundamentally provides a theoretical structure of communal or collective ownership-consumption arrangements.

Club goods are often excluded in order to get people to pay either by nonprofits in order to cover their fixed costs or by for-profit entities to make a profit. For example if you don’t pay for software, you can't download it. If you don’t buy a concert ticket, you can't enter the concert. Although club good marginal cost can be negligible, there will almost always be a deadweight loss from controlling access to it. A cost is imposed on consumers and another cost is borne by providers (from enforcing the mechanisms for exclusion). For toll roads there is the tollbooth installation cost. For software, this deadweight loss arises through the cost of technological measures like encrypting software or digital rights management.