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The Free-Rider Problem

By: Sara Fazal, Jasmine Hui, and Emily Doan

Public vs. Private Goods

Public Goods-

Non- Excludability

Jointly Consumed

Non- Rejectability

Examples-

Lighthouses

Parks

Street Lights

Private Goods-

Exclusive

Pay a Fee

Not provided for you

Examples-

Personal Electronics

Clothes

Food

Works Cited

"Free Rider Problem." Investopedia. N.p., n.d. Web. 14 July

2015.

Mata, Vernhis. "Social Dilemma- Free Rider Problem."

Weblog post. Everyday Sociology. Baruch College, 8 Aug. 2012. Web. 14 July 2015.

"Capitalism 2.0: The Free Rider Problem." Weblog post. One Million

by One Million Blog. Sramana Mitra, 26 Sept. 2011. Web. 14 July 2015.

Pettinger, Tejvan. "Free Rider Problem." Weblog post. Economics

Help. N.p., 22 May 2011. Web. 14 July 2015.

Wigmore, Ivy. "Tragedy of the Commons." Whatis.com. TechTarget,

Aug. 2013. Web. 14 July 2015.

Examples

Results of Free-Riding

Everyday:

Sneaking into a concert without paying admission.

Political:

Using National Security, when you don't pay taxes, but still take the benefit of the protection they provide.

- Tragedy of the Commons

- Goods becoming Private

- Tighter restrictions

- Non-Sustainability

- Laziness

How to Solve

Tragedy of the Commons

- Incentives

- Sanctions

- Force

- Legislation/Laws

What is Free-Riding?

Definition:

Occurs when individuals exploit a shared resource to the extent that demand overwhelms supply and the resource becomes unavailable to some or all.

Definition:

A situation where some individuals in a population either consume more than their fair share of a common resource, or pay less than their fair share of the cost of a common resource.

Image by Tom Mooring

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