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Unformatted text preview: goods, or at least fail to produce them at a desired level because of free riders.-The free rider problem happens because the public good is non-excludable Solution for Free Rider Problem-Taxation- The government can serve as the coordinating agency by collecting revenue from individuals in the form of taxes and then providing the good.-Size- the smaller the group the more likely it will overcome the free-riding because of lower organizational cost, bigger impact of individual contribution, and larger per capita benefit.-Appealing to people’s altruism; asking for donations if you enjoy using public good. There will be many free rider who don’t make donation, but -Making a public good private- making people to pay for entrance like bay bridge...
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This note was uploaded on 11/29/2010 for the course SOM 306 taught by Professor Shruti during the Spring '10 term at George Mason.
- Spring '10