Question

Your economics professor assigns a group project for the course. Describe the free-rider problem that can lead to a suboptimal outcome for your group. To combat this problem, the instructor asks you to evaluate the contribution of your peers in a confidential report. Will this evaluation have the desired effects?

Answer 1

If there is no peer confidential report then team members will underperform as the group achieves the marks based on the assignment as a whole and not individual contribution hence giving rise to the free-rider hence the team members will tend to not perform. The evaluation report of the peers will induce free riders to perform as these free-riders would be discovered through the confidential report and would receive lower marks or grade hence solving the problem of the free-rider.