Free rider problem

A free rider benefits from others' effort without contributing. In markets it explains why price-correcting research is undersupplied: whoever pays to uncover a fraud captures only part of the gain from correcting it.

history and doctrine · updated 2026-09-08

See also

• Short selling — Short selling is selling borrowed securities in the expectation of buying them back cheaper. It is lawful, it improves price disco…
• Price discovery — Price discovery is the process by which trading aggregates dispersed information into a price. Manipulation is harmful precisely b…

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