The Free Rider Problem
- Inventor of Game: Heinz Kohler (originated term)
The term “free rider” is likely one you heard in history class a few times. This game was essentially formulated to find the best strategy to deal with the free-rider problem. Data proves to us that in many situations, all individual members of a group can benefit from the efforts of each member. All can then benefit from collective action. As an example, if everyone pollutes less by driving our cars less, then we ALL benefit from the reduction of harmful gases reducing in the air we breathe. We might even pay for this over other things, and as long as it works out, we’re good. But if something costs more than it is worth, it is no longer a collective good.
For example, you might pollute less but that does not matter enough for anyone, especially you, to notice. Thus, you might not contribute your fair share toward not polluting the atmosphere. However, if it improves in spite of your contribution, YOU are a free-rider here. You’ve seen benefits without putting your fair share or anything into this. Within the world of game theories, the free-rider problem will usually always result in a negative issue where some benefit by doing nothing while others lose in the hope of some benefit. It might seem dumb to pay money out of our pocket while others who put in $0.00 then benefit from it. However, if this is something like a road for example, then everyone needed to have this. Therefore, the benefit is so great that it exceeds the potential loss within the free-rider issue.