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The concept of the "free rider" is described in your text as someone who lets others...

The concept of the "free rider" is described in your text as someone who lets others pay for a good and then "free rides" on the purchases of others. How does this topic tie in which the idea of public goods? Please explain.

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Answer #1

A free rider problem arise in the market of public gods only. Public goods are those good that are non rival and non excludable i.e. if a person is consuming that good its value for the other doesn't decrease and no one can be stopped to benefit from the consumption of these good.

If the good is private it is rival i.e. of one person is consuming it other can be denied and its is excludable i.e. a person can be stopped form using it only because he has not paid for it. A public good faces the free rider problem because the person cannot be stopped to consume it. hence, he may or may not pay for it raising the frree rider problem.

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