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Economics

Public Goods Dilemmas and Free-Rider Problems

Quick fact

Public goods—like national defense or street lighting—can be impossible to provide through the market alone because individuals can enjoy them without paying, leading everyone to wait for someone else, a problem called free-riding, which results in under-provision or even complete absence.

Why this is interesting

Ever enjoyed a clean park or a fireworks show without paying a cent? Why do we still have them if no one has a personal incentive to pay?