Questions on The Free Rider Problem and Public Goods

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Advertising cannot be used to address the free-rider dilemma for all public goods. This issue arises as members of the public want to maximize the positive. These people believe that the rest of humanity would not go to such great lengths to misuse the good or service. There are some public resources that deplete with time. In societies that depend on popular grazing lands, for example, a farmer who overstocks to fully exploit the resource appears to disadvantage the others. Using the resource for ads would not fix the dilemma. The two goods mentioned bear the full characteristics of public goods: they are neither excludable nor rival. In addition, they do not face the free rider problem because there is no logical explanation on how one can overuse a lighthouse or tornado siren. Therefore, the example cannot be applied to others that face this problem such as the common grazing grounds above. The strategy would be a good try for these non-excludable and non-rival goods but cannot apply to all the public goods.

Local governments provide parking slots for motorists which is not a public service because it is excludable. The authorities have the ability to track down defaulters and clamp their vehicles until they clear the balances. If this service was exclusively left to private investors, individuals would be prone to exploitation because it is almost a necessity.

Education is one key service that has positive externalities. Educated individuals are a lesser burden to the society in the sense that they avoid poverty and ignorance that has negative effects on the larger society. The government should directly fund all levels of education and allow individuals to access the services based on merit.

November 09, 2022

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