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Is it rational to be a free rider?

In this article we will describe in more detail the problem of free riding that was shown in the previous video and examine how this problem is relate
Women is refraining from buying a ticket
© ACTISS

In this article we will describe in more detail the problem of free riding and examine how this problem is related to different types of goods.

We will say that somebody is a free rider if he/she gives in to the temptation to use a certain shared good without contributing to its production and/or maintenance.

In the kitchen story a clean kitchen was an example of such a situation. If the kitchen is clean it is hard to imagine how to exclude flatmates from enjoying it. On the other hand, you can use a clean table and a supply of clean dishes etc. and without having cleaned yourself. It raises the temptation of using a clean kitchen without cleaning. The most prominent example of free riding is the one that the phenomenon took its name from: using public transport without paying. You could see it in the video. Anna could enter a train without paying – it was hard to exclude her from its use. And everytime when she does not buy a ticket she does not contribute to the public transport system. Another example of a free rider could be a person who comes without alcohol and snacks for a bring-your-own-bottle party.

There are some situations and types of goods when there is a higher risk of free riding. First of all, what you already heard in the previous video, it is typical for non-excludable goods, i.e. whenever it is hard to exclude somebody from using a good. In the case of public transport, if there is no ticket control at the station, it is really hard to exclude somebody from riding a subway. Of course, transport companies have their own tricks to avoid it. You will learn more about solutions designed to tackle the free rider problem later in the course.

Another important issue is associated with the consequences of free riding. Let’s think about goods such as lighting or public television. No matter how many people pass by a lantern and no matter if they pay taxes that help pay for electricity and for maintenance, there is still enough light for the other passers-by. No matter how many people watch public TV without paying appropriate fees, it’s still available for others to watch for free. So, with this type of goods the consequences of free riding are not very painful for all those who pay or contribute in any other way. We call them non-rivalrous goods.

However, is it possible that with such goods it doesn’t matter that people free ride? Not really. If too many people follow the temptation, the quality of a good may diminish in time. It can happen if the television company does not receive enough funding and commercial revenue. This means they will have less money for programs ensuring high viewing rates, they will start repeating series already played, etc. This will cause a further decrease in viewership and so on.

Let’s think about a different example. What if some people use coffee in the common office? Coffee is common, but every person who will use it reduces the amount of the resource. Such goods, whose quantity (or quality) diminishes when people use it, are called rivalrous goods. With such goods, the consequences of free riding are definitely more painful. At some point, the coffee is out!

Due to the detrimental effects of free riding, free riders are often disciplined. Furthermore, their choices often lead to resentment. People who do contribute feel they are being cheated on because they need to contribute more to maintain the same quality of a good. Although it seems it’s not fair to be a free rider, we all are sometimes tempted to be one…

© ACTISS
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Understanding Human Behaviour: Introduction to Game Theory and Shared Resources

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