Free Riding

… a core term used in Economic Analysis and Atlas102

Definition

The Economist (reference below) defines free riding as getting the benefit of a good or service without paying for it, not necessarily illegally.

The Economist goes on to say:

“This may be possible because certain types of goods and services are actually hard to charge for – a firework display, for instance. Another way to look at this may be that the good or service has a positive externality. However, there can sometimes be a free-rider problem, if the number of people willing to pay for the good or service is not enough to cover the cost of providing it. In this case, the good or service might not be produced, even though it would be beneficial for the economy as a whole to have it. Public goods are often at risk of free riding; in their case, the problem can be overcome by financing the good by imposing a tax on the entire population.”

Atlas topic, subject, and course

Public Goods and Commons Problems (core topic) in Economic Analysis and Atlas102 Economic Analysis.

Sources

The Economist, Free riding, Economics A-Z, at http://www.economist.com/economics-a-to-z/f#node-21529606, accessed 9 May 2016.

Page created by: Ian Clark, last modified 9 May 2016.