For 4.6 billion years, the Sun has provided free energy, light, and warmth to Earth, and no one ever realized what a huge moneymaking opportunity is going to waste. Well, at long last, the Sun is finally under new ownership.

Angeles Duran, a woman from the Spanish region of Galicia, is the new proud owner of the Sun. She says she got the idea in September when she read about an American man registering his ownership of the Moon and most of the planets in the Solar System – in other words, all the celestial bodies that don’t actually do anything for us.

Duran, on the other hand, snapped up the solar system’s powerhouse, and all it cost her was a trip down to the local notary public to register her claim. She says that she has every right do this within international law, which only forbids countries from claiming planets or stars, not individuals:

“There was no snag, I backed my claim legally, I am not stupid, I know the law. I did it but anyone else could have done it, it simply occurred to me first.”

She will soon begin charging for use.  I advise her to hire a good consultant because pricing The Sun is not your run-of-the-mill profit maximization exercise. First of all, The Sun is a public good.  No individual Earthling’s willingness to pay incorporates the total social value created by his purchase.  So it’s going to be hard to capitalize on the true market value of your product even if you could get 100% market share.

Even worse, its a non-excludable public good.  Which means you have to cope with a massive free-rider problem.  As long as one of us pays for it, you turn it on, we all get to use it.  So if you just set a price for The Sun, forget about market share, at most your gonna sell to just one of us.

You have to use a more sophisticated mechanism.  Essentially you make the people of Earth play a game in which they all pledge individual contributions and you commit not to turn on The Sun unless the total pledge exceeds some minimum level.  You are trying to make each individual feel as if his pledge has a chance of being pivotal:  if he doesn’t contribute today then The Sun doesn’t rise tomorrow.

A mechanism like that will do better than just hanging a simple price tag on The Sun but don’t expect a windfall even from the best possible mechanism.  Mailath and Postlewaite showed, essentially, that the maximum per-capita revenue you can earn from selling The Sun converges to zero as the population increases due to the ever-worsening free-rider problem.

You might want to start looking around for other planets in need of a yellow dwarf and try to generate a little more competition.

(Actual research comment:  Mailath and Postlewaite consider efficient public good provision.  I am not aware of any characterization of the profit-maximizing mechanism for a fixed population size and zero marginal production cost.)

[drawing:  Move Mountains from]