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Public Goods - The Wifi Thief

Thanks to Geoff Riley who shared this one on twitter.

In the video, a neighbour complains (via some sort of doorbell camera) that his neighbour has put a password on the wifi and can't understand why the wifi owner won't give it to him - after all, it's not costing the owner any extra if his neighbour uses some which 'leaks out' (?!).

See below for questions, explanations and a script of the video.


Possible Questions:

  • Why does Neighbour A believe they have a right to use Neighbour B's Wi-Fi?

  • How does Neighbour B’s action of putting a password on their Wi-Fi relate to the concept of excludability in public goods?

  • What aspects of Neighbour A's argument align with the characteristics of a public good?

  • Discuss whether Wi-Fi can be considered a non-rivalrous good based on this conversation.

  • How does the script illustrate the problem of free-riding in the context of quasi-public goods?

  • Evaluate Neighbour B's claim of ownership over the Wi-Fi signal. How does this reflect the private nature of some goods?

  • In the context of the script, explain how Wi-Fi could be considered a club good.

  • What economic principle is Neighbour B applying by securing their Wi-Fi with a password?

  • How does the script highlight the difficulty in defining the boundaries of a private good?

  • Compare Neighbour A's view of Wi-Fi as a public good with traditional examples of public goods.

  • What does Neighbour A’s expectation for free Wi-Fi access suggest about consumer behaviour in relation to public and quasi-public goods?

  • How does the conversation illustrate the issue of non-excludability in certain goods and services?

  • Discuss the potential consequences of everyone in a neighbourhood sharing Wi-Fi without restrictions.

  • In what ways does the script demonstrate the tragedy of the commons in relation to Wi-Fi usage?

  • How could government intervention be justified in a scenario similar to Neighbour A and B’s Wi-Fi conflict?

  • What role does the concept of scarcity play in Neighbour B’s decision to secure their Wi-Fi?

  • How does the dialogue between Neighbour A and B reflect the challenges in managing resources that have characteristics of both private and public goods?

  • What other forms of market failure exist in the market for wifi?

  • In the 2019 General Election, the Labour Party campaigned on a policy of universal free broadband.

I'm also keen to set my students the challenge of working out whether this video is staged or not - I'm looking forward to hearing the evidence both ways.

Summary of Economic Concepts Illustrated

The Right to Use: Public Goods and Excludability

Neighbour A’s belief in their right to use Neighbour B’s Wi-Fi hinges on the perception of Wi-Fi as a public good. In economic terms, public goods are non-excludable and non-rivalrous. However, Neighbour B’s action of securing the Wi-Fi with a password introduces excludability, transforming a quasi-public good into a private one. This shift underscores the importance of control over access in defining the nature of goods in economics.

Wi-Fi: A Public or Private Good?

The nature of Wi-Fi as a public or private good is central to this discussion. While Neighbour A views it as non-excludable and non-rivalrous, similar to traditional public goods like national defense, Neighbour B’s viewpoint aligns with the private good characteristics - excludability and rivalry. The reality that Wi-Fi, despite its seemingly intangible nature, can be limited (in terms of bandwidth) and controlled (through passwords), positions it more accurately as a private good.

The Free-Rider Problem and Club Goods

Neighbour A’s usage of the Wi-Fi without contributing to its cost is a classic illustration of the free-rider problem often encountered in quasi-public goods. Additionally, the video introduces the concept of club goods. Once Neighbour B secures the Wi-Fi with a password, it becomes a club good – exclusive for those who have access, yet within that group, it remains non-rivalrous until bandwidth limits are reached.

Boundaries and Externalities

The script also highlights the difficulty in defining the boundaries of a private good like Wi-Fi, where physical barriers do not restrict the service. Neighbour A’s argument about Wi-Fi signals being public once they extend beyond Neighbour B’s property is a misinterpretation of externalities - benefits or costs that affect bystanders who are not directly involved in the economic transaction.

Tragedy of the Commons and Government Intervention

The dialogue exemplifies the tragedy of the commons - unrestricted access to a limited resource leading to overuse and degradation of quality. This scenario opens the door to discussions about the role of government intervention in regulating access and usage to prevent such outcomes.

The Role of Scarcity

Scarcity is a driving force in Neighbour B’s decision to secure their Wi-Fi. The concept of scarcity, central to economics, highlights that unlimited access by others can strain and deplete a resource, reducing its availability and quality for the intended user.

Script Format Neighbour A: Hey, I live next door. I've got problems with the Wi-Fi.

Neighbour B: Okay, so why are you here?

Neighbour A: It's your Wi-Fi, isn't it? Have you done something?

Neighbour B: I've not got a problem with my Wi-Fi.

Neighbour A: Well, I've got problems with your Wi-Fi. You've put a password on it.

Neighbour B: What do you mean?

Neighbour A: Look, I've been here 2 years. I've happily used the Wi-Fi, and now I see you've put a password on it and I can't use it. I think you're being unreasonable.

Neighbour B: Sorry, what?

Neighbour A: It's very simple. You have Wi-Fi, right? I've been using your Wi-Fi for a couple of years, and all of a sudden, you put a password on it, and I've got no access. Let me have your password, and that's the end of the problem.

Neighbour B: Hold on, you've been using my Wi-Fi?

Neighbour A: I don't know how much of your Wi-Fi it is. I mean, the signal doesn't remain just within your four walls. What comes out here is public, so I can use the signal.

Neighbour B: But now you can't because I put a password on it.

Neighbour A: That's exactly right. So, let me have your password, or you can remove your password. It's pretty simple, really.

Neighbour B: I'm paying for it. Why should I? My Wi-Fi was really slow, and my broadband provider suggested I put a password on it to make it faster.

Neighbour A: That's very unreasonable. It's not neighbourly.

Neighbour B: It's not public, though, is it?

Neighbour A: It is. It always used to be.

Neighbour B: I protected it with a password.

Neighbour A: I don't think that's very neighbourly. You keep your Wi-Fi within the house, but anything that comes out through the walls is public.

Neighbour B: That Wi-Fi is still mine.

Neighbour A: If you want to use some of it, sit in your garden. Let me know when you're using it so it doesn't interfere with my downloading.

Neighbour B: The thing is, I put a password on it, so now it's just mine.

Neighbour A: You're being unreasonable. It's not neighborly.

Neighbour B: If I leave my front door open, would you go inside and help yourself to a sandwich? Is that neighborly?

Neighbour A: So long as you wipe your feet. And probably give us a bit of notice.

Neighbour B: For the last two years, you've been using my Wi-Fi. I've been paying for it, and it was slow. They told me to put a password on it. Since then, it's been working fine.

Neighbour A: Because it's there. I don't understand why you don't grasp what's happening here. You pay for the Wi-Fi within your house, and what leaks outside is for anybody else to use.

Neighbour B: Who said that? That's not common knowledge.

Neighbour A: It's like litter. You empty your bins, and what falls on the floor, other people will pick up. That's how I see your Wi-Fi.

I can't find the original video owner to credit him/her

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