Free rider problem
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In economics and political science, free riders are actors who consume more than their fair share of a resource, or shoulder less than a fair share of the costs of its production. The free rider problem is the question of how to prevent free riding from taking place, or at least limit its negative effects.
Because the notion of "fairness" is controversial, free riding is usually only considered to be an economic "problem" when it leads to the non-production or under-production of a public good, and thus to Pareto inefficiency, or when it leads to the excessive use of a common property resource.
A common example of a free rider problem is defense spending: no person can be excluded from being defended by a state's military forces, and thus free riders may refuse or avoid paying for being defended, even though they are still as well guarded as those who contribute to the state's efforts. Therefore, it is usual for the government to avoid relying on volunteer donations, using taxes and/or conscription instead.
See also
- public good
- CrimethInc
- tragedy of the commons
- assurance contracts
- Malibu surfer problem
- Prisoner's Dilemma
- TANSTAAFL
- Welfare state
- literal free riding:
- *freighthopping
- *stowaway
References
- Richard Cornes and Todd Sandler, The Theory of Externalities, Public Goods and Club Goods 2nd ed. (1996)
- Joshi Venugopal, Drug imports: the free-rider paradox, Express Pharma Pulse, (2005), 11(9), 8. This article refers to the free-rider problem in global pharmaceutical research.[link]
External links
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