Free-rider problem
What Free-rider problem means in Economics A-Level, as defined for AQA.
Definitions of Free-rider problem
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Reference: AQA
Consumers benefit without paying, so rational individuals withhold payment, causing the price mechanism to fail entirely.
The problem that arises from non-excludability, meaning the free market will fail to provide pure public goods.
Occurs when individuals consume a good or service without paying for it, leading to market failure.
Topics that use Free-rider problem
- Public goods, private goods and quasi-public goods (AQA A-Level)
Related terms
- Capacity constraints
- Environmental market failures
- Excludability
- Non-excludability
- Property rights
- Quasi-public good
- Quasi-public goods
- Technological change
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