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"free rider"

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Constittuionalist posted on Sat, Nov 13 2010 8:50 AM

I have been trying to dissect the issue of "the free rider problem". The way I see it is someone makes a voluntary exchange with somebody else and yet he receives "more than his fair share". Maybe this is the case because he offered more compensation to the seller in exchange "for more of his fair share".

Even if there was such a problem as someone earning something that he somehow did not earn, in this case being a "free rider", does ir really have such a major impact on economic activity as to warrant it a problem? Ben o'neil in one of his articles talked about the case of the beekeeper. But this is somewhat of a fallacy because it might have been the unintended consequence of how the beekeeper is operating his business and it could have been the owners fault by not taking good care of his beehive. The other aspect that is a fallacy is that if someone doesn't do what the other owners are doing, as in the case of the business owners and trash on their sidewalk (can't remember the article) that is his choice and the business owners that are doing the opposite either have to shape up or go broke.

Maybe I am misunderstanding what "the free rider problem is all about"?

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Points 870

I think you are looking at it the wrong way. The free rider problem is part and parcel of public goods theory, it doesn't have anything to do with "fairness" in a voluntary exchange (where it seems to be fair enough to begin with given the exchange is by definition voluntary).

See:

http://mises.org/journals/rae/pdf/RAE10_1_1.pdf

and

http://mises.org/journals/jls/9_1/9_1_2.pdf

 

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