The free rider problem leads to under-provision of a good or service and thus causes market failure.
Pure public goods are not normally provided by the private sector because they would be unable to supply them for a profit. For example, national defence is a pure public good that will not be provided at all if the government does not provide it because of the free rider problem.
The free rider problem leads to under- provision of a good or service and thus causes market failure.
Free riders have little or no incentive to reveal how much they are willing and able to pay for a public good because they can enjoy a benefit without paying.
Overcoming the free rider problem
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