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MENTAL MODEL · M11874

Samuelson Condition

Samuelson Condition
BusinessHigh supportPublic Economics
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Updated 2026-08-13

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INTRODUCTION

English translation pending.

CORE DEFINITION

The Samuelson condition states that a public good is supplied optimally when the sum of every individual's marginal benefit equals the marginal cost of provision. Because public goods are non-excludable and non-rival, private markets under-supply them, since private incentive and social optimum diverge and a collective mechanism is required to cover the gap. The term is also used for Samuelson's revealed-preference axiom, so the field must be fixed first.

SCAFFOLDING EFFECT

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- Market-failure test: ask whether the good is non-excludable, which explains why private supply falls short. - Sum the benefits: add every individual's marginal benefit across users before comparing to cost. - Scope fixing: state which Samuelson condition is meant before arguing about it.

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Non-excludability means each person can enjoy the good without paying, so individual willingness to pay understates the social benefit and the private market stops short of the optimum. Summing benefits restores the true value and shows why collective provision is needed.

MINIMUM ACTION

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Source support: Explicit

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    en.wikipedia.orghttps://en.wikipedia.org/wiki/Samuelson_conditionZH · Explicit
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