Advantages Of Being A Free Rider

833 Words4 Pages
If the group succeeds in its endeavor, then very often these gains are available to those who are not its members. The latter enjoy these rewards without making any effort to obtain them. It is rational to be a "free rider". For example, when a union agrees to raise wages, this increase usually applies to all employees of the company, regardless of whether they are members of the union or not. Consequently, the decision to be a "free rider", as economists describe this kind of action, "drive" through the efforts of others, is very rational. Collective actions are always connected with the problem of a free rider: the difficulty of implementing mutually beneficial collective actions because of the possibility of obtaining economic agents benefits without participation in common costs.
M. Olson argues that the poorer people, the more expensive it
…show more content…
1) First, the larger the group, the smaller the share of an individual in the overall result, and the less adequate compensation for any group action, and the further the group is removed from effective work.
2) Secondly, the larger the group, the less likely that any subgroup of this group will receive a sufficient amount of collective good to bear the costs of securing even a small amount of this good; or, in other words, the larger the group, the less likely the oligopolistic interaction that would help ensure the collective good.
3) Thirdly, the greater the number of participants in a group, the higher the organizational costs and the higher the obstacle that must be overcome before at least some collective good is secured. Due to all this, the larger the group, the further it will move away from providing itself with the optimal amount of public good, and usually very large groups, in the absence of coercion or external influence, will not be able to provide it, even in the smallest amount ...
Get Access