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Free-Riding versus Paying under Uncertainty

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  • Vincy Fon

    (George Washington University)

Abstract

An uncertainty model with a choice of free-riding is presented. The model does not provide theoretical justification to support a conclusion that rational individuals will always choose to free-ride. In the case of a contributor, a smaller likelihood of the undesirable event and a less effective benefit production function both lead to a smaller contribution by an individual. However, an individual who becomes more risk-averse, depending on the probability of the undesirable event and the effectiveness of the benefit production function, might choose to make either a larger or smaller contribution.

Suggested Citation

  • Vincy Fon, 1988. "Free-Riding versus Paying under Uncertainty," Public Finance Review, , vol. 16(4), pages 464-481, October.
    • Handle: RePEc:sae:pubfin:v:16:y:1988:i:4:p:464-481
    DOI: 10.1177/109114218801600404
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    References listed on IDEAS

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    Cited by:

    1. Luigi Mittone & Francesca Bortolami, 2007. "Free riding and norms of control: self determination and imposition. An experimental comparison," CEEL Working Papers 0704, Cognitive and Experimental Economics Laboratory, Department of Economics, University of Trento, Italia.
    2. Todd Sandler & John Posnett, 1991. "The Private Provision of Public Goods: a Perspective on Neutrality," Public Finance Review, , vol. 19(1), pages 22-42, January.

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