Car Donation Hawaii
Which of the following scenarios demonstrates the concept of the free-rider problem?
A. Public radio is funded through private donations. However, everyone can listen to it, whether or not they have donated.
B. A toll bridge requires that every car crossing the bridge pay a toll.
C. A school fundraiser raffles off a free trip to Hawaii. Anyone can buy raffle tickets, but there is only one winner.
D. The local gym offers dance lessons at a very low cost during the weekend.
The free-rider problem happens when the system depends on everyone chipping in, but it’s possible for some people to come by and enjoy the benefits of the system without chipping in. Those people are “free-riders”.
Look at each of these scenarios and ask yourself, “Does this situation depend on each person chipping in a little bit? Is it possible for someone to get the benefits without chipping in?” If the answer to both of these is “yes”, you’ve found an example of the free-rider problem.
