Examining the rationality of free riding: A multifaceted analysis

Abstract

Free riding, characterized by individuals benefiting from shared resources without contributing equitably, presents a pervasive challenge across diverse domains. This paper leverages insights from game theory to analyze strategic interactions and decision-making within scenarios involving shared resources. It employs classic games such as The Prisoner's Dilemma and The Tragedy of the Commons as illustrative examples, offering deeper insights into the rational choices individuals make when deciding whether to cooperate or free ride. Furthermore, the paper incorporates perspectives from behavioral economics and seminal economic theories, including public goods theory, the tragedy of the commons, game theory, principal-agent theory, and market failure with externalities. Through rigorous examination and analysis, our aim is to contribute to the growing body of knowledge surrounding free riding and its implications for economic decision-making and societal well-being.