Free Rider

A free rider is someone who shares in the gains of others, without proportionate contribution.

This problem is endemic in American corporations. In an expanding macro-economy / business cycle, if someone is hired as a CEO of a company, and the company’s sales and profits keep increasing more because of the economic growth than because of diligent efforts from the CEO, the CEO fits the definition of a free rider!

In similar vain, free riders can abound at the bottom of a corporate pyramid as well. Someone who knowingly produces less compared to his colleagues without getting caught by his / her manager, is also a free rider.


Also see Principal-Agent Problem.





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