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 ?
Tuck); la principal tiene que ver con una caracteristica fundamental de todas estas propuestas: el hecho de que el enfoque se centra en un modelo politico y economico de la logica de la accion colectiva, segun el cual el free rider reduce considerablemente el beneficio de la accion de la comunidad--tal como sucede en el caso del "dilema del prisionero", cuando alguno de ellos se atreva a confesar--.
This, in turn, may well make the free rider problem return with a vengeance.
The amounts of money that individuals and corporations would need to contribute in order to support a proper, rights-protecting government would be so small (especially compared to what they are forced to pay in taxes today)--and the cost of being an irrational free rider would be so great--that few people or corporations would be so irrational as to miscalculate.
A standard argument maintains that such goods--necessarily to be available to every member of a given public if provided to any--will consistently be underproduced on the market because too many people will yield to the temptation to be free riders and so avoid contributing to the cost of providing them, so they must be delivered by a state with the power to fund them by using taxation (pp.
(5) The benefit most widely asserted is that RPM, or vertical price fixing, can control free rider problems, and thereby encourage dealer services, promote interbrand competition, and enhance consumer welfare.
Although Free Rider had got off the mark as a two-year-old in October 1999, that had been his sole success in 18 outings.
(4.) In the extreme case that a free rider takes all benefits and no cost, [micro] = 0.
A critical problem of the people's commune system was the inability to resolve the "free rider" problem within the framework of collective agriculture.
Accessory goods and services can be provided at no extra cost to the consumer in place of the special services, thereby bolstering the free rider's offering to consumers while maintaining the required minimum retail price.
The dependent variable FREE RIDE takes a value of one if the worker covered by union contract is a free rider and zero if the worker is a union member.
During and after his election campaign, he often described South Korea as a "free rider" in the defense alliance with the U.S.
Our free rider mindset entrenches deeper structural problems.