Free rider problem

The free rider problem ( engl. free rider problem) refers to a collective action problem that can occur with the use of common goods, if economic agents gain the benefits of a good without consideration. It occurs in both pure public goods as well as common pool, since there is not or only with disproportionate effort is an exclusion from the use of such goods possible. The name is derived from the Black riding on the running boards of trams.

Free-rider problem in public goods

For pure public goods such as in street lighting or dikes has the free-rider behavior means that not all users of these goods are prepared to pay for their creation and maintenance costs. Consequently, such goods are not available or not sufficiently by private providers. This is also known from a provisioning problem. Therefore, public goods are usually provided by the state and financed through taxes.

Free-rider problem with common pool

For common pool ( impure public goods ) due to the free-rider behavior threatens to overuse. One speaks here of a appropriation problem. Due to the free access freeloaders can benefit by other individual users of a self-limitation by intensifying their use accordingly. This collective action problem is described by the social science model tragedy of the commons. Examples are overcrowded roads, overfishing of the oceans, but also overloaded peer-to -peer networks. As solutions for the Allmendeproblem government restrictions on use or the establishment of private property rights are recommended. At least in manageable Communities enforcement of self-restraint in the use of collective goods can be supported under certain circumstances but also by social sanctions.