Free Rider Problem

What is the free rider problem?

The free rider problem describes when someone gets the benefit of a good or service without incurring a cost for it.

You know how when you have a group assignment, there always seems to be one slacker? They hardly contribute, but receive the same grade as you!

That’s an example of a free rider problem that most of us are all too familiar with.

The types of goods and services that are particularly prone to the free rider problem are called public goods. In the video, we’ll get into another free rider problem scenario that could have life or death consequences: the public good of protecting the planet from an asteroid strike.

Interested in learning more about public goods? Check out our Micro section on Public Goods and the Tragedy of the Commons.