The free rider problem is an issue in economics. It is considered an example of a market failure. That is, it is an inefficient distribution of goods or services that occurs when some individuals are allowed to consume more than their fair share of the shared resources or pay less than their share of the costs. https://www.investopedia.com/terms/f/free_rider_problem.asp
It is often observed that members have little interest in monitoring their cooperatives. One explanation is that the members are free riders, hoping that others will perform the task. Another explanation is that the real member interest is a consequence of members having trust in the leadership. These competing explanations refer to the theory of collective action and the social capital paradigm respectively, and may be linked to the classical Gesellschaft and Gemeinschaft concepts. Hence, one may expect free-rider behavior when Gemeinschaft condition tule. These propositions get support from five previous studies of members’ low interest in governing their cooperatives. To a limited extent, a membership may have a subset of members who trust the leadership so they do not read the annual reports.
Ref: J Erker Nilsson and Gert Tinggaard S Vendsen Free Riding or Trust? Why Members (do not) Monitor their Cooperatives. Journal of Rural Cooperation, 39(2) 2011:131–150 https://ageconsearch.umn.edu/record/163923/
Address:
27A Eastland street Dianella 6059 WA
Email:
admin@grainbulkhandlersassociation.org
Phone:
0459111901
