A friend of mine wrote me:

I am commenting about the demand/supply curves of buskers and of donation box activities. So, what does the supply and demand curve look like for a guitar-toting busker who lays his cap out on the ground?

My reply:

The busker is basically trying to produce a "public good."

There is no problem on the supply side as the willingess of the busker to play is surely a function of the expected amount of money he can get. (I notice that they're not there at 5 in the morning when nobody's around!) If he expects more money, I expect he'll play longer. The basis for his supply curve would be the marginal opportunity cost of the busker's time. (Playing on the street means less time in the bar drinking after all so he does have an opportunity cost for the use of his scarce time.)

The problem is on the demand side. Because listeners can listen even if they don't pay, they have an incentive to "free ride"; i.e., enjoy the service without paying for it. I'm sure you've seen people (done it yourself?) listen and then walk away without contributing. Normally in markets, non-paying customers are denied the good, but in this case the public nature of the good makes that difficult. Once the busker starts playing for a paying listener, then non-paying listeners can listen too and basically free-ride on the payments of the payers. Obviously, if everyone tries to free-ride on everyone else, then the busker is out of business as no one would be paying him for his services.

Economists can construct "demand curves" for public goods, but they are quite different from regular demand curves in their construction. And we have no a priori reason to expect an equilibrium where demand intersects supply.

To me, the really interesting thing is that buskers are in business at all. Despite producing a public good and giving people an incentive to free-ride, there are enough people willing to contribute freely that the buskers stay in business anyway. Since the existence of public goods is a main argument for government action, such examples are useful to show that the private sector can sometimes produce adequate amounts of public goods. (Technically however it is doubtful that we'd get the so-called "efficient" amount produced.)