The Lighthouse

Ships passing through dangerous waters needed a lighthouse. Every captain agreed it was vital. But no captain wanted to pay for it.

“Once the lighthouse is built,” each captain reasoned, “its light shines on everyone. Whether I pay or not, I benefit. So why pay?”

Every captain reasoned this way. No lighthouse was built. Ships continued to wreck.

The light couldn’t be aimed at paying customers and withheld from non-payers. Its benefit was inherently shared. And because it was shared, no one had a private incentive to provide it.