Free-Rider problem....

User Generated

gq4422

Economics

Description

Give an example of a free-rider problem.....

Maximum 50 words

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Explanation & Answer

Free rider, in economics, refers to someone who benefits from resources, goods, or services without paying for the cost of the benefit.

In group insurance, the employees get the benefits when they are met with accidents though the premium is paid by the organization.

In a labor union, free riding occurs if an employee pays no union dues or agency shop fees, but benefits from union representation.

Ref:

http://en.wikipedia.org/wiki/Free_rider_problem



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