Free Riding

Free Riding means getting the benefit of a good or service without paying for it. This may be possible because certain types of goods and services are actually hard to charge for--a firework display, for instance. Free riders are those who consume a resource without paying for it, or pay less than the full cost of its production.   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. Free riding is usually considered to be an economic "problem" only when it leads to the non-production or under-production of a public good, or when it leads to the excessive use of a common property resource.  Public goods are often at risk of free riding. The free rider problem is the question of how to limit free riding (or its negative effects) in these situations.  The problem can be overcome by financing the good by imposing a tax on the entire population.