Free Rider
The free rider problem describes the economic quandary where individuals benefit from a good or service without contributing to its cost, impacting public goods and collective action.
Tumisang Bogwasi
Tumisang Bogwasi
What is Free Rider?
The free rider problem is an economic concept that describes a situation where individuals or entities consume a good or service without contributing to its cost, leading to underproduction or underprovision of that good or service. This phenomenon is particularly prevalent with public goods, which are non-excludable and non-rivalrous, making it difficult to charge individuals for their use.
In a market economy, individuals are incentivized to act in their own self-interest. When a good or service can be consumed by anyone, regardless of whether they pay for it, there is little incentive for any single individual to voluntarily contribute to its provision. Each individual reasons that they can benefit from the good or service as long as others pay for it, thus
