The free rider problem

Man is basically a social being. People help each other not only strategically, so with the purpose to gain from it, but also often for non-selfish reasons. However, the less someone is related to you, the smaller the chance that you will help this person for nothing, in the sense that you’ll not profit from it in some way. You are more likely to help a family member, a friend or a neighbour than a stranger, maybe in this order. And contributing to the “common good” without a special reason is not what many people do, for the idea of common good is quite abstract: Who are they, actually, whom you are supposed to help? Moreover, nothing is free. Every contribution to the common good brings you costs, at least in time and effort, and often also in money. For instance, you are asked to deposit your plastic waste in a common container at the end of your street, but nobody will force you or fine you if you don’t. Then the easiest for you is to put your plastic in your litter bin at home.
It is in this social space that the so-called free rider problem can arise. A free rider doesn’t only ignore the social well-being of others or the “common good”, s/he also profits from doing so. Or, to use the definition of the Stanford Encyclopedia of Philosophy, a “free rider, most broadly speaking, is someone who receives a benefit without contributing towards the cost of its production.” An example that refers to the name of the problem is someone who takes the train but doesn’t buy a ticket. This person profits from the train service by a free train journey. Of course, there is the risk of being caught and fined, but if you are clever, you can minimalize this risk. And why wouldn’t you travel for free? One passenger more or less has no impact on the train service. True, when too many people think so, the train service will stop. That’s why the free rider problem is not simply a matter of someone who breaks the rules or the law, and that’s it. It can grow from an individual problem (an individual not paying the required contribution) into a social problem (the collective service or what kind of social activity we are talking about is undermined). The threat that the individual free rider problem becomes a social free rider problem is always in the background.
Some characteristics of the free rider problem are:
- The action is individual, the consequences are social.
- One single case of free riding doesn’t influence the availability of the common good. If enough people are vaccinated against a disease but you don’t want to have the jab for reasons of principle, nevertheless you’ll be protected by the herd immunity.
- The free rider problem is common with public goods. If enough people reduce pollution, everyone in society will benefit.
These characteristics show that the free rider problem has a clear moral aspect. It undermines the sociality of humans, so the idea that in the end we belong together and should help each other. 

Why people are free riders is sometimes explained by means of a prisoner’s dilemma game, such as this one, which I took almost literally from the website of the Corporate Finance Institute (see Sources):
Tom and Adel are considering a contribution to a public good. The personal cost of contributing is $6 and the benefit is $10. However, there is also an incentive to free ride as the benefit of this public good is freely available among the members of society.

Explanation:
- If Tom and Adel both contribute, the total benefit would be $20. Each person gains $10 for a net gain of +$4 ($10 – $6).
- If one person contributes but the other does not, the total benefit would only be $10. Each person gains $5, so the person who contributes would realize a net gain of -$1 while the person who does not would realize a net gain of +$5. So, if Adel contributes and Tom does not, Abel would be contributing $6 for a net gain of -$1 and Tom would be contributing $0 for a net gain of +$5 (because the benefit of the public good is divided among all members of society).
- If neither Adel nor Tom contributes to the public good, there would be no costs and no benefits of the public good (net gain of $0).
In the prisoner’s dilemma game above, we can see that both Tom and Adel would attempt to free ride (not contribute): If Adel thinks that Tom will not contribute, she would lose $1 for contributing, while, if Adel thinks that Tom will contribute, she would gain more by not contributing. Therefore, both people would come to the conclusion that it would be unwise to contribute. The public good, therefore, does not get built and thus a free rider problem is created. 

Several solutions are proposed for the free rider problem, such as
- Taxes, so that everybody pays, anyway.
- An appeal to altruism.
- Making a public good private, so making a barrier to profit by the once public good.
- Legislation that regulates use of the free good.
Of course, which solution is best, depends on the good concerned. 

Sources
- “Free Rider. Benefiting from a common resource without paying for it”, on https://corporatefinanceinstitute.com/resources/knowledge/economics/free-rider/
- Hardin, Russel, “The Free Rider Problem”, in Stanford Encyclopedia of Philosophy, on https://plato.stanford.edu/entries/free-rider/#toc 13 October 2020.
- Pettinger, Tejvan “Free Rider Problem” on https://www.economicshelp.org/blog/1626/economics/free-rider-problem/ , 22 May 2019.