People who use goods without paying for their use are known as free riders. The term was first used in The Logic of Collective Action: Public Goods by Mancur Olson. Free riders can negatively affect the economy and lead to a lack of collective goods that benefit everyone. What is the Free Rider Problem? The free rider problem is an economic term that describes a scenario where people benefit from resources like goods and services without paying for them. In a worst-case scenario, free riding can lead to market failure when a large volume of free riders consume goods and services. The free rider problem usually arises when it comes to public goods, which are goods one person can consume without creating a lack of availability for others. Public goods are also non-excludable, meaning individuals or groups can’t be excluded from consuming the goods. Since public goods don’t have any consumption limits, excess use can impact the producer. The main issue with free riding is people don’t have an incentive to contribute even though they benefit from the product or service. This can lead to