 One point that advocates of government provision of public goods often overlook is the information creation and coordinating function of the price system (as described by Hayek 1945). In a market, prices generate information about preferences and scarcities. If a good is wanted by many individuals, it will become more scarce and its price will rise. The increase in price does not only provide a reason for consumers to buy less of it, it also signals to producers to make more and to potential market entrants that the market is lucrative. In the long run, supply should therefore increase and the price fall again. This mechanism does not operate when the government provides the public good and finances it by taxation. If the government builds, say, a lighthouse, it will be difficult to determine how much to invest every year, whether and how to extend or alter the service provided by the good (e.g., by building a second lighthouse nearby), and whether to invest in the development of new technologies.