What are the challenges of ''free rider'' problems?

Answer 1

The "free rider" problem occurs when individuals benefit from resources or services without contributing to their cost, leading to underfunding and potential depletion of those resources. This challenge is particularly prevalent in public goods, such as clean air or national defense, where it's difficult to exclude non-payers from enjoying the benefits. As a result, the incentive to contribute diminishes, undermining the sustainability and quality of the goods or services. Ultimately, this can lead to a reliance on government intervention or collective action to address the imbalance.