Question

The situation of individuals receiving the benefits of collective action without contributing is known as:________

Answer 1

The situation of individuals receiving the benefits of collective action without contributing is known as the "free-rider problem".

In economics, the free rider dilemma is a problem. It is regarded as a prime illustration of a failed market. In other words, it is an inefficient distribution of products or services when some people are permitted to use more than their fair share of the common resource or pay less than their fair part of the expenses.

A free rider is someone who demands that others pay for a public good even though they intend to utilize it themselves; if many people engage in free riding, the public good may never be given. Free riders try to use the public good without paying for it, which makes it challenging for markets to produce them.

To learn more about the free-rider problem refer to:

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