[PPT] - FREE FREE FREE FREE RIDE RIDE RIDE RIDE W HAT HAT IS IS F REE PowerPoint Presentation

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FREE FREE FREE FREE RIDE RIDE RIDE RIDE

WHAT

HAT HAT HAT IS IS IS IS FREE REE REE REE RIDE RIDE RIDE RIDE?

WHO

HO HO HO ARE ARE ARE ARE FREE REE REE REE RIDERS RIDERS RIDERS RIDERS?

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AGENDA AGENDA AGENDA AGENDA

INTRODUCTION

NTRODUCTION NTRODUCTION NTRODUCTION

EXPLAINING

XPLAINING XPLAINING XPLAINING WHO WHO WHO WHO IS IS IS IS FREE FREE FREE FREE RIDER RIDER RIDER RIDER AND AND AND AND EXAMPLES EXAMPLES EXAMPLES EXAMPLES

VIDEO

IDEO IDEO IDEO

E

EXPERIENCE

XPERIENCE XPERIENCE XPERIENCE

RULES

ULES ULES ULES

HYPOTHESES

YPOTHESES YPOTHESES YPOTHESES

RESULTS

ESULTS ESULTS ESULTS

OBSERVATION

BSERVATION BSERVATION BSERVATION

QUESTIONS

UESTIONS UESTIONS UESTIONS

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Free Free rider rider

A PERSON WHO CHOOSES TO RECEIVE THE BENEFITS

OF A "PUBLIC GOOD" OR A "POSITIVE EXTERNALITY" WITHOUT CONTRIBUTING TO PAYING THE COSTS OF PRODUCING THOSE BENEFITS.

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THE TERM FREE

FREE RIDER RIDER WAS FIRST USED IN ECONOMIC THEORY OF PUBLIC GOODS, BUT SIMILAR CONCEPTS HAVE BEEN APPLIED IN TO OTHER CONTEXTS, INCLUDING COLLECTIVE BARGAINING, ANTITRUST LAW, PSYCHOLOGY, AND POLITICAL SCIENCE

THE

HE HE HE CONCEPTS CONCEPTS CONCEPTS CONCEPTS THAT THAT THAT THAT INDIVIDUALS INDIVIDUALS INDIVIDUALS INDIVIDUALS COULD COULD COULD COULD RECEIVE RECEIVE RECEIVE RECEIVE THE THE THE THE BENEFITS BENEFITS BENEFITS BENEFITS FROM FROM FROM FROM GROUP GROUP GROUP GROUP ACTIVITY ACTIVITY ACTIVITY ACTIVITY WITHOUT WITHOUT WITHOUT WITHOUT BEARING BEARING BEARING BEARING THEIR THEIR THEIR THEIR PROPORTIONAL PROPORTIONAL PROPORTIONAL PROPORTIONAL SHARE SHARE SHARE SHARE OF OF OF OF THE THE THE THE COSTS COSTS COSTS COSTS WAS WAS WAS WAS A CENTRAL CENTRAL CENTRAL CENTRAL THEME THEME THEME THEME AND AND AND AND IS IS IS IS COMMONLY COMMONLY COMMONLY COMMONLY REFERRED REFERRED REFERRED REFERRED AS AS AS AS FREE FREE FREE FREE RIDING RIDING RIDING RIDING OR OR OR OR THE THE THE THE FREE FREE FREE FREE RIDER RIDER RIDER RIDER PROBLEM PROBLEM PROBLEM PROBLEM

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WHAT WHAT WHAT WHAT IS IS IS IS THE PROBLEM??? THE PROBLEM??? THE PROBLEM??? THE PROBLEM???

IN ECONOMICS, THE FREE RIDER PROBLEM OCCURS WHEN THOSE WHO BENEFIT

FROM RESOURCES, GOODS, OR SERVICES DO NOT PAY FOR THEM, WHICH RESULTS IN AN UNDER-PROVISION OF THOSE GOODS OR SERVICES.

QUESTION ???
HOW TO LIMIT FREE RIDING AND ITS NEGATIVE EFFECTS IN THESE SITUATIONS???

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THE FREE RIDER PROBLEM MAY OCCUR WHEN PROPERTY RIGHTS ARE

NOT CLEARLY DEFINED AND IMPOSED.

PUBLIC GOODS ARE CHARACTERIZED BY THE INABILITY TO EXCLUDE

NONPAYERS.

THE FREE RIDER PROBLEM IS COMMON AMONG PUBLIC GOODS.

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THESE ARE GOODS THAT HAVE TWO CHARACTERISTICS:

non-excludability — non-paying

non-rivalry

CONSUMERS CANNOT BE PREVENTED

FROM USING IT

WHEN

YOU CONSUME THE GOOD, IT DOES NOT REDUCE THE AMOUNT AVAILABLE TO OTHERS.

THE POTENTIAL FOR FREE RIDING EXISTS WHEN PEOPLE ARE ASKED TO VOLUNTARILY PAY FOR A PUBLIC GOOD

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COMMON COMMON COMMON COMMON EXAMPLE EXAMPLE EXAMPLE EXAMPLE

A FREE RIDER PROBLEM IS DEFENSE SPENDING. NO ONE PERSON

CAN BE EXCLUDED FROM BEING DEFENDED BY A STATE'S MILITARY FORCES, AND THUS FREE RIDERS MAY REFUSE OR AVOID PAYING FOR BEING DEFENDED, EVEN THOUGH THEY ARE STILL AS WELL GUARDED AS THOSE WHO CONTRIBUTE TO THE STATE'S EFFORTS.

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A PERSON

PERSON PERSON PERSON USING USING USING USING PUBLIC PUBLIC PUBLIC PUBLIC TRANSPORT TRANSPORT TRANSPORT TRANSPORT WITHOUT WITHOUT WITHOUT WITHOUT A VALID VALID VALID VALID TICKET TICKET TICKET TICKET IS IS IS IS BENEFIT BENEFIT BENEFIT BENEFITED ED ED ED WHICH WHICH WHICH WHICH CARRIES CARRIES CARRIES CARRIES THIS THIS THIS THIS SERVICE SERVICE SERVICE SERVICE, AT AT AT AT THE THE THE THE SAME SAME SAME SAME TIME TIME TIME TIME NOT NOT NOT NOT BEAR BEAR BEAR BEAR THE THE THE THE COST COST COST COST FOR FOR FOR FOR ITS ITS ITS ITS MAINTENANCE MAINTENANCE MAINTENANCE MAINTENANCE…

A PERSON

PERSON PERSON PERSON USES USES USES USES THAT THAT THAT THAT OTHER OTHER OTHER OTHER USERS USERS USERS USERS PAY PAY PAY PAY, SO SO SO SO IT IT IT IT CAN CAN CAN CAN ALSO ALSO ALSO ALSO USE USE USE USE…

BUT

BUT BUT BUT WITHOUT WITHOUT WITHOUT WITHOUT THE THE THE THE COST COST COST COST OF OF OF OF THEIR THEIR THEIR THEIR OWN OWN OWN OWN…

IT

IT IT IT IS IS IS IS DIFFICULT DIFFICULT DIFFICULT DIFFICULT TO TO TO TO EXCLUDE EXCLUDE EXCLUDE EXCLUDE A PERSON PERSON PERSON PERSON FROM FROM FROM FROM CONSUMPTION CONSUMPTION CONSUMPTION CONSUMPTION

ANYONE

ANYONE ANYONE ANYONE CAN CAN CAN CAN TAKE TAKE TAKE TAKE THE THE THE THE PUBLIC PUBLIC PUBLIC PUBLIC TRANSPORT TRANSPORT TRANSPORT TRANSPORT

OTHER OTHER OTHER OTHER EXAMPLE EXAMPLE EXAMPLE EXAMPLE

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VIDEO VIDEO VIDEO VIDEO

http://www.investopedia.com/video/play/free-rider-problem/

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LET’S LET’S LET’S LET’S PLAY PLAY PLAY PLAY A A A A GAME GAME GAME GAME… … … … RULES RULES RULES RULES

IN ANDREONI

NDREONI NDREONI NDREONI’S EXPERIENCE EXPERIENCE EXPERIENCE EXPERIENCE :

5

5 5 5 PLAYERS

PLAYERS PLAYERS PLAYERS WITH WITH WITH WITH 50

50 50 50 TOKENS

TOKENS TOKENS TOKENS EACH EACH EACH EACH WHO WHO WHO WHO CONTRIBUTE CONTRIBUTE CONTRIBUTE CONTRIBUTE TO TO TO TO COMMON COMMON COMMON COMMON OR OR OR OR PRIVATE PRIVATE PRIVATE PRIVATE ACCOUNT ACCOUNT ACCOUNT ACCOUNT.

. . .

PRIVATE

RIVATE RIVATE RIVATE ACCOUNT ACCOUNT ACCOUNT ACCOUNT : 1

: 1 : 1 : 1 FOR

FOR FOR FOR 1

COMMON

OMMON OMMON OMMON ACCOUNT ACCOUNT ACCOUNT ACCOUNT :

: : : FOR

FOR FOR FOR 1,

1, 1, 1, ALL

ALL ALL ALL RECEIVE RECEIVE RECEIVE RECEIVE 0.5

0.5 0.5 0.5

THE

HE HE HE GROUP GROUP GROUP GROUP'S TOTAL TOTAL TOTAL TOTAL PAYOFF PAYOFF PAYOFF PAYOFF IS IS IS IS MAXIMIZED MAXIMIZED MAXIMIZED MAXIMIZED WHEN WHEN WHEN WHEN EVERYONE EVERYONE EVERYONE EVERYONE CONTRIBUTES CONTRIBUTES CONTRIBUTES CONTRIBUTES ALL ALL ALL ALL OF OF OF OF THEIR THEIR THEIR THEIR TOKENS TOKENS TOKENS TOKENS TO TO TO TO THE THE THE THE PUBLIC PUBLIC PUBLIC PUBLIC POOL POOL POOL POOL (1

(1 (1 (1 VS

VS VS VS 2.5)

2.5) 2.5) 2.5)

THOSE

HOSE HOSE HOSE WHO WHO WHO WHO DO DO DO DO NOT NOT NOT NOT CONTRIBUTE CONTRIBUTE CONTRIBUTE CONTRIBUTE ARE ARE ARE ARE CALLED CALLED CALLED CALLED FREE FREE FREE FREE RIDERS RIDERS RIDERS RIDERS.

. . .

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LET’S LET’S LET’S LET’S PLAY PLAY PLAY PLAY A A A A GAME GAME GAME GAME… … … … HYPOTHESES HYPOTHESES HYPOTHESES HYPOTHESES

NO SIGNIFICANT

SIGNIFICANT SIGNIFICANT SIGNIFICANT EVIDENCE EVIDENCE EVIDENCE EVIDENCE ON ON ON ON FREE FREE FREE FREE RIDING RIDING RIDING RIDING IN IN IN IN SINGLE SINGLE SINGLE SINGLE-SHOT SHOT SHOT SHOT GAMES GAMES GAMES GAMES

IN REPEATED

REPEATED REPEATED REPEATED GAMES GAMES GAMES GAMES,

, , , DECAY

DECAY DECAY DECAY OF OF OF OF PROVISION PROVISION PROVISION PROVISION OF OF OF OF THE THE THE THE PUBLIC PUBLIC PUBLIC PUBLIC GOOD GOOD GOOD GOOD TOWARD TOWARD TOWARD TOWARD FREE FREE FREE FREE RIDING RIDING RIDING RIDING LEVEL LEVEL LEVEL LEVEL WITH WITH WITH WITH EACH EACH EACH EACH REPETITION REPETITION REPETITION REPETITION

OFTEN

FTEN FTEN FTEN APPROXIMATION APPROXIMATION APPROXIMATION APPROXIMATION OF OF OF OF FREE FREE FREE FREE RIDING RIDING RIDING RIDING AFTER AFTER AFTER AFTER SUBJECTS SUBJECTS SUBJECTS SUBJECTS TRIALS TRIALS TRIALS TRIALS,

, , , ALTHOUGH

ALTHOUGH ALTHOUGH ALTHOUGH EXACT EXACT EXACT EXACT FREE FREE FREE FREE RIDING RIDING RIDING RIDING IS IS IS IS SELDOM SELDOM SELDOM SELDOM REALIZED REALIZED REALIZED REALIZED

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LET’S LET’S LET’S LET’S PLAY PLAY PLAY PLAY A A A A GAME GAME GAME GAME… … … … HYPOTHESES HYPOTHESES HYPOTHESES HYPOTHESES

P

PARTNER

ARTNER ARTNER ARTNER / S

/ S / S / STRANGER

TRANGER TRANGER TRANGER

RESTART

ESTART ESTART ESTART

HOW

OW OW OW DO DO DO DO THEY THEY THEY THEY SHOULD SHOULD SHOULD SHOULD REACT REACT REACT REACT ?

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LET’S LET’S LET’S LET’S PLAY PLAY PLAY PLAY A A A A GAME GAME GAME GAME… … … … RESULTS RESULTS RESULTS RESULTS

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LET’S LET’S LET’S LET’S PLAY PLAY PLAY PLAY A A A A GAME GAME GAME GAME… OBSERVATIONS … OBSERVATIONS … OBSERVATIONS … OBSERVATIONS

OBSERVATION

BSERVATION BSERVATION BSERVATION 1 : CONTRIBUTIONS

ONTRIBUTIONS ONTRIBUTIONS ONTRIBUTIONS BY BY BY BY PARTNERS ARTNERS ARTNERS ARTNERS ARE ARE ARE ARE SIGNIFICANTLY SIGNIFICANTLY SIGNIFICANTLY SIGNIFICANTLY SMALLER SMALLER SMALLER SMALLER THAN THAN THAN THAN CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS BY BY BY BY

STRANGERS

TRANGERS TRANGERS TRANGERS IN IN IN IN ALL ALL ALL ALL 10

10 10 10 ROUNDS

ROUNDS ROUNDS ROUNDS AND AND AND AND THE THE THE THE DIFFERENCE DIFFERENCE DIFFERENCE DIFFERENCE GROWS GROWS GROWS GROWS AS AS AS AS THE THE THE THE LAST LAST LAST LAST ROUND ROUND ROUND ROUND APPROACHES APPROACHES APPROACHES APPROACHES.

OBSERVATION

BSERVATION BSERVATION BSERVATION 2 : IN ALL

ALL ALL ALL 10

10 10 10 ROUNDS

ROUNDS ROUNDS ROUNDS THE THE THE THE PERCENT PERCENT PERCENT PERCENT OF OF OF OF FREE FREE FREE FREE RIDING RIDING RIDING RIDING PARTNERS ARTNERS ARTNERS ARTNERS IS IS IS IS GREATER GREATER GREATER GREATER THAN THAN THAN THAN THE THE THE THE PERCENT PERCENT PERCENT PERCENT OF OF OF OF FREE FREE FREE FREE RIDING RIDING RIDING RIDING STRANGERS TRANGERS TRANGERS

TRANGERS. THE

HE HE HE DIFFERENCE DIFFERENCE DIFFERENCE DIFFERENCE IS IS IS IS GREATEST GREATEST GREATEST GREATEST IN IN IN IN THE THE THE THE LAST LAST LAST LAST ROUND ROUND ROUND ROUND AND AND AND AND IS IS IS IS STATISTICALLY STATISTICALLY STATISTICALLY STATISTICALLY SIGNIFICANT SIGNIFICANT SIGNIFICANT SIGNIFICANT.

OBSERVATION 3 : THE

HE HE HE CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS BY BY BY BY PARTNERS ARTNERS ARTNERS ARTNERS ARE ARE ARE ARE SMALLER SMALLER SMALLER SMALLER IN IN IN IN ROUND ROUND ROUND ROUND 10

10 10 10, BUT

BUT BUT BUT ARE ARE ARE ARE STILL STILL STILL STILL ABOVE ABOVE ABOVE ABOVE THE THE THE THE FREE FREE FREE FREE RIDING RIDING RIDING RIDING LEVEL LEVEL LEVEL LEVEL.

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LET’S LET’S LET’S LET’S PLAY PLAY PLAY PLAY A A A A GAME GAME GAME GAME… OBSERVATIONS … OBSERVATIONS … OBSERVATIONS … OBSERVATIONS

OBSERVATION

BSERVATION BSERVATION BSERVATION 4 : THE

HE HE HE CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS BY BY BY BY STRANGERS TRANGERS TRANGERS TRANGERS ARE ARE ARE ARE GREATER GREATER GREATER GREATER THAT THAT THAT THAT CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS BY BY BY BY P

P P PARTNERS

ARTNERS ARTNERS ARTNERS IN IN IN IN THE THE THE THE LAST LAST LAST LAST ROUND ROUND ROUND ROUND.

OBSERVATION

BSERVATION BSERVATION BSERVATION 5 : STRANGERS

TRANGERS TRANGERS TRANGERS APPEAR APPEAR APPEAR APPEAR TO TO TO TO BE BE BE BE ONLY ONLY ONLY ONLY TEMPORARILY TEMPORARILY TEMPORARILY TEMPORARILY AFFECTED AFFECTED AFFECTED AFFECTED BY BY BY BY THE THE THE THE RESTART RESTART RESTART RESTART.

OBSERVATION 6 : PARTNERS

ARTNERS ARTNERS ARTNERS RETURN RETURN RETURN RETURN TO TO TO TO HIGH HIGH HIGH HIGH CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS CONTRIBUTIONS AFTER AFTER AFTER AFTER THE THE THE THE RESTART RESTART RESTART

RESTART. THE

HE HE HE RESTART RESTART RESTART RESTART ALSO ALSO ALSO ALSO SEEMS SEEMS SEEMS SEEMS TO TO TO TO HAVE HAVE HAVE HAVE A LASTING LASTING LASTING LASTING EFFECT EFFECT EFFECT EFFECT ON ON ON ON THIS THIS THIS THIS GROUP GROUP GROUP

GROUP. ON THE

THE THE THE OTHER OTHER OTHER OTHER HAND HAND HAND HAND, THE THE THE THE STRANGERS TRANGERS TRANGERS TRANGERS WERE WERE WERE WERE NOT NOT NOT NOT AFFECTED AFFECTED AFFECTED AFFECTED AS AS AS AS STRONGLY STRONGLY STRONGLY STRONGLY AND AND AND AND TREATED TREATED TREATED TREATED THE THE THE THE RESTART RESTART RESTART RESTART AS AS AS AS A CONTINUATION CONTINUATION CONTINUATION CONTINUATION OF OF OF OF THE THE THE THE REPEATED REPEATED REPEATED REPEATED SINGLE SINGLE SINGLE SINGLE-

SHOT

SHOT SHOT SHOT GAME GAME GAME GAME.

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LET’S LET’S LET’S LET’S PLAY PLAY PLAY PLAY A A A A GAME GAME GAME GAME… … … … INTERPRETATION INTERPRETATION INTERPRETATION INTERPRETATION / /EXPLANATION EXPLANATION EXPLANATION EXPLANATION

BASED

ASED ASED ASED ON ON ON ON OBSERVATIONS OBSERVATIONS OBSERVATIONS OBSERVATIONS 1-6 :

BOTH BOTH BOTH BOTH RATIONAL RATIONAL RATIONAL RATIONAL STRATEGIC STRATEGIC STRATEGIC STRATEGIC PLAY PLAY PLAY PLAY AND AND AND AND LEARNING LEARNING LEARNING LEARNING HYPOTHESES HYPOTHESES HYPOTHESES HYPOTHESES ARE ARE ARE ARE CONTRADICTED CONTRADICTED CONTRADICTED CONTRADICTED IN IN IN IN THIS THIS THIS THIS STUDY STUDY STUDY STUDY.

ANDREONI

NDREONI NDREONI NDREONI SUGGESTS SUGGESTS SUGGESTS SUGGESTS THAT THAT THAT THAT PERHAPS PERHAPS PERHAPS PERHAPS THE THE THE THE HYPOTHESES HYPOTHESES HYPOTHESES HYPOTHESES DO DO DO DO NOT NOT NOT NOT FOCUS FOCUS FOCUS FOCUS ON ON ON ON THE THE THE THE RIGHT RIGHT RIGHT RIGHT KIND KIND KIND KIND OF OF OF OF LEARNING LEARNING LEARNING

LEARNING. IT IS

IS IS IS POSSIBLE POSSIBLE POSSIBLE POSSIBLE THAT THAT THAT THAT SUBJECTS SUBJECTS SUBJECTS SUBJECTS HAVE HAVE HAVE HAVE LEARNED LEARNED LEARNED LEARNED THE THE THE THE SINGLE SINGLE SINGLE SINGLE-SHOT SHOT SHOT SHOT DOMINANT DOMINANT DOMINANT DOMINANT STRATEGY STRATEGY STRATEGY STRATEGY, BUT BUT BUT BUT HAVE HAVE HAVE HAVE NOT NOT NOT NOT LEARNED LEARNED LEARNED LEARNED THE THE THE THE BACKWARD BACKWARD BACKWARD BACKWARD INDUCTION INDUCTION INDUCTION INDUCTION NECESSARY NECESSARY NECESSARY NECESSARY TO TO TO TO UNDERSTAND UNDERSTAND UNDERSTAND UNDERSTAND THE THE THE THE EQUILIBRIUM EQUILIBRIUM EQUILIBRIUM EQUILIBRIUM.

ALSO

LSO LSO LSO AN AN AN AN UNDERSTANDING UNDERSTANDING UNDERSTANDING UNDERSTANDING OF OF OF OF THE THE THE THE SINGLE SINGLE SINGLE SINGLE-

SHOT

SHOT SHOT SHOT EQUILIBRIA EQUILIBRIA EQUILIBRIA EQUILIBRIA DOES DOES DOES DOES NOT NOT NOT NOT NECESSARILY NECESSARILY NECESSARILY NECESSARILY REVEAL REVEAL REVEAL REVEAL AN AN AN AN UNDERSTANDING UNDERSTANDING UNDERSTANDING UNDERSTANDING OF OF OF OF THE THE THE THE REPEATED REPEATED REPEATED REPEATED-GAME GAME GAME GAME STRUCTURE STRUCTURE STRUCTURE

STRUCTURE. THE

HE HE HE RESULTS RESULTS RESULTS RESULTS ALSO ALSO ALSO ALSO SUGGEST SUGGEST SUGGEST SUGGEST THAT THAT THAT THAT ONE ONE ONE ONE MIGHT MIGHT MIGHT MIGHT WANT WANT WANT WANT TO TO TO TO CONSIDER CONSIDER CONSIDER CONSIDER AN AN AN AN ALTERNATIVE ALTERNATIVE ALTERNATIVE ALTERNATIVE TO TO TO TO MONETARY MONETARY MONETARY MONETARY PAYOFF PAYOFF PAYOFF PAYOFF MAXIMIZING MAXIMIZING MAXIMIZING MAXIMIZING MODEL MODEL MODEL MODEL, FOR FOR FOR FOR EXAMPLE EXAMPLE EXAMPLE EXAMPLE SUBJECTS SUBJECTS SUBJECTS SUBJECTS GETTING GETTING GETTING GETTING NON NON NON NON-

MONETARY

MONETARY MONETARY MONETARY PLEASURE PLEASURE PLEASURE PLEASURE FROM FROM FROM FROM COOPERATIVE COOPERATIVE COOPERATIVE COOPERATIVE OUTCOMES OUTCOMES OUTCOMES OUTCOMES OR OR OR OR INVESTING INVESTING INVESTING INVESTING BEING BEING BEING BEING CONSISTENT CONSISTENT CONSISTENT CONSISTENT WITH WITH WITH WITH SOCIAL SOCIAL SOCIAL SOCIAL NORMS NORMS NORMS NORMS ABOUT ABOUT ABOUT ABOUT PARTICIPATION PARTICIPATION PARTICIPATION PARTICIPATION IN IN IN IN SOCIAL SOCIAL SOCIAL SOCIAL DILEMMAS DILEMMAS DILEMMAS

DILEMMAS. DECAY

ECAY ECAY ECAY IN IN IN IN THIS THIS THIS THIS CASE CASE CASE CASE MIGHT MIGHT MIGHT MIGHT REPRESENT REPRESENT REPRESENT REPRESENT THE THE THE THE GROUPS GROUPS GROUPS GROUPS' STRUGGLES STRUGGLES STRUGGLES STRUGGLES TO TO TO TO ESTABLISH ESTABLISH ESTABLISH ESTABLISH A NORM NORM NORM NORM

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QUESTION QUESTION QUESTION QUESTION 1 1

What is the definition of free-rider ?

1- A person who takes place in the game without changing groups and who can play strategically or not. 2- A person who chooses to receive the benefits of a "public good" or a "positive externality" without contributing to paying the costs of producing those benefits. 3- A person who is randomly reassigned by the computer after each repetition. 4- A person who likes off-piste skiing.

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QUESTION QUESTION QUESTION QUESTION 1 1

What is the definition of free-rider ?

1- A person who takes place in the game without changing groups and who can play strategically or not. Partner 2- A person who chooses to receive the benefits of a "public good" or a "positive externality" without contributing to paying the costs of producing those benefits. Free-rider 3- A person who is randomly reassigned by the computer after each repetition. Stranger 4- A person who likes off-piste skiing. Also true but irrelevant here

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QUESTION QUESTION QUESTION QUESTION 2 2

What is the Nash Equilibrium ?

1- It is an economic state where resources are allocated in the most efficient manner. Pareto efficiency is obtained when a distribution strategy exists where one party's situation cannot be improved without making another party's situation worse. 2- is a concept of game theory where the optimal outcome of a game is one where no player has an incentive to deviate from his or her chosen strategy after considering an opponent's choice. 3- is a situation in game theory in which one person’s gain is equivalent to another’s loss, so the net change in wealth or benefit is zero. 4- It is the fact when Nash is able to stand without falling.

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QUESTION QUESTION QUESTION QUESTION 2 2

What is the Nash Equilibrium ?

1- It is an economic state where resources are allocated in the most efficient manner. Pareto efficiency is obtained when a distribution strategy exists where one party's situation cannot be improved without making another party's situation worse. Pareto efficiency 2- It is a concept of game theory where the optimal outcome of a game is one where no player has an incentive to deviate from his or her chosen strategy after considering an opponent's

choice. Nash Equilibrium

3- It is a situation in game theory in which one person’s gain is equivalent to another’s loss, so the net change in wealth or benefit is zero. Zero-Sum Game 4- It is the fact when Nash is able to stand without falling. Nothing worth to mention it

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THANKS THANKS THANKS THANKS FOR FOR FOR FOR YOUR YOUR YOUR YOUR ATTENTION ATTENTION ATTENTION ATTENTION