The free rider problem is one important reason private markets do a poor job of supplying public goods. As we saw in the section on optimal provision, allocatively efficiency in the provision of a pure public goods means that the sum of individual Marginal Utilities must equal the Marginal Cost of provision. The free rider problem arises because there is a strong incentive for individuals to misrepresent (lie about) their true Marginal Utility for a public good.

   Let's consider a simple example in which a large class of, say, 1000 economics students is trying to decide how many statues to have built in honor of their economics professor. Clearly all students will appreciate statues honoring their prof (any hint of sarcasm or irony in this example is purely the reader's imagination ;-) and the more the better. Statues are clearly non-rival in consumption in that one student may admire the statues as much as she likes without reducing the pleasure all other students receive from admiring the same statues.

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