free rider

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Free rider

A follower who avoids the cost and expense of finding the best course of action simply by mimicking the behavior of a leader who made these investments.

Free Rider

An investor whose investment decisions mimic those of another larger investor or firm. A free rider effectively places his/her hope in the larger investor to make profitable decisions. This is, of course, risky for the free rider because he/she does little to no research on his/her own, but this saves the expense of doing so. See also: Free Rider Problem.

free rider

a CONSUMER who deliberately understates his or her preference for a COLLECTIVE PRODUCT in the hope of being able to consume the product without having to pay the full economic price for it.

For example, where a number of householders seek to resurface their common private road, an individual householder might deliberately understate the value of the resurfaced road to himself on the grounds that the other householders will pay to have all the road resurfaced anyhow and that he will therefore enjoy the benefit of it without having to pay towards its resurfacing. See CLUB PRINCIPAL.

References in periodicals archive ?
Managers of HealthCare.gov and the state-based exchange programs have been trying to bring the hammer down on free riders lately, and the S&P analysts expect to see the hammer keep hammering.
The last and probably the worst appeared in Obama's interview with The Atlantic, where he uttered the unheard of "free riders" to describe the GCC states and other nations.
Now it's up to the states to decide whether right-to-work laws create free riders, or whether fair-share dues violate workers' rights.
If the dam can be higher or lower depending on the desired level of risk protection, then it becomes in the interest of many free riders to withhold their participation in a conditional contract as a dam one fraction of an inch lower will not materially affect their risk while significantly diminishing their financial burden.
And he voiced his frustration with European countries he branded "free riders" for relying on US military muscle to achieve their foreign policy goals.
Details of the US president's warning came in a lengthy interview in The Atlantic magazine, in which Mr Obama explained his frustration with "free riders" in the international community who call for action in humanitarian and security crises but fail to make their own military resources available.
Obama also accused Middle East countries, particularly Saudi Arabia of being "Free Riders".
The second, nonrivalry in consumption, states that even if it were possible to exclude free riders, it would not be efficient to do so since the marginal cost of an additional user would be zero.
It's human nature to punish free riders who abuse shared public goods, such as drivers who park in express lanes during rush hour.
The study also predicts that if collaborative abilities do not evolve, only a small fraction of the general population cooperates for public good while the rest become free riders.
"They are free riders, and they've been free riders for the last 30 years, and it's worked really well for them," Obama said.
It is often claimed that since in the case of common goods the social gains, including the gains of free riders, outweigh the private gains of the producers, the incentive to produce them by private, profit-driven entrepreneurs is significantly undermined.