economics and Thunder over Louisville

One interesting thing is how to pay for the amazing fireworks display-- when their provision struggles from what economists call "public goods". To note, people can view the fireworks and it is impossible to charge admission-- so a provider would incur costs but cannot collect adequate revenues (unless most people voluntarily pay what it's worth to them). Consumers can "free ride" and the firm will take a beating. Obviously, firms will be unwilling to do this!

One remedy is to have the fireworks paid for through tax revenue-- getting around the "free rider" problem by coercively taking money from locals. Another is to find "sponsors" who pick up the tab but are compensated through advertising exposure (the solution Louisville has embraced).

In today's C-J, we read about another economic issue for Thunder: an over-crowded river. The solution? Market prices...

Waterfront Development Corp. officials are getting ready to auction off some prime viewing spots for Thunder Over Louisville on April 12.

The agency that runs Waterfront Park will auction off the 12 boat slips adjacent to the Great Lawn between the Kennedy and Clark Memorial bridges.

A slip will be assigned to a successful bidder based on the amount of the bid, size of vessel and the date the bid is received in the Waterfront Development Corp. office. The agency reserves the right to reject any bids.

Bidders must agree to the following terms of use...

The kind of stuff that warms an economist's heart!