Economics Dictionary of ArgumentsHome
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| Free-rider problem: The free-rider problem in economics occurs when individuals benefit from a good or service without directly paying for it, relying on others to bear the cost. This often happens with public goods, which are non-excludable and non-rivalrous, leading to under-provision or overuse since individuals have an incentive to avoid contributing while still enjoying the benefits. See also Moral Hazard, Public goods, Collective Goods, Social Goods, Government service._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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James M. Buchanan on Free-rider Problem - Dictionary of Arguments
Boudreaux I 79 Free-rider Problem/Buchanan/Boudreaux/Holcombe: The chief problem that exists with many collective activities that are potentially beneficial to all is that each individual has an incentive to free ride off of the contributions of others. This problem exists whenever it is difficult to exclude those who don’t pay for some good or service from using it. Under such a circumstance, each person has the incentive not to pay for the good, hoping that others will pay for it. The result is that there will be too few contributions toward the good’s financing. Social goods: A good that everyone wants to consume will be underprovided. In this situation, individuals might agree to be forced to pay toward financing the good if everyone else is also forced to pay. Everyone could hold the same opinion, saying they do not want to pay unless everyone is forced to pay, but they would all agree to a policy that forces everyone to pay. People could agree to be coerced. >Moral Hazard, >Coercion. Social contract/agreement: The idea that people could agree to be coerced lies at the foundation of the social-contract theory of the state. Even though there is no actual contract, people would agree to give the state the authority to coerce those who violate its mandates, if everyone was bound to the same contract provisions. According to social-contract theory, because people would agree to be coerced for their own benefit, the exercise of such coercion violates no individual’s rights. >Agreement/Buchanan, >Social Contract/Buchanan, >Society/Buchanan, >Social goods, >Common goods._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
EconBuchan I James M. Buchanan Politics as Public Choice Carmel, IN 2000 Boudreaux I Donald J. Boudreaux Randall G. Holcombe The Essential James Buchanan Vancouver: The Fraser Institute 2021 Boudreaux II Donald J. Boudreaux The Essential Hayek Vancouver: Fraser Institute 2014 |
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