Define the Free-rider problem in economics

Business Dec 10, 2020

Define the Free-rider problem in economics.

Expert Solution

The problem of free-rider occurs in the economy when an individual or group of individual enjoys the benefits derived from public goods or resources without actually paying for them. The problem of free-rider is one of the causes of market failure in the economy. For example - few people pay to Wikipedia, but the benefits are enjoyed by millions of people over the internet.

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