Question

There are millions of unique visitors that consult Wikipedia, the free

online encyclopedia. The contents of the website are written by voluntary

contributors, and rarely does any of the readers make an edit. In 2011,

Wikipedia’s fund-raising campaign showed that only 3% of non-editing readers

donated to this non-profit. So clearly there are millions of readers who free ride

on the efforts of the editors and donors.

a. (5 points) Do you think that the knowledge made available via Wikipedia

is a public good? Evaluate (that is, provide your arguments for or against)

it based on the non-rivalness and the non-excludability features of a

public good.

b. (5 points) If you were to suggest some ways to reduce the free riding, what

would they be? Be specific.

Answer 1

a. Public goods are those goods which all enjoy in common. There are two characterstics of public good:

• Non rivalry: Marginal cost of of providing the good to an additional consumer is zero. In other words it means that if public good is consumed by one person then its amount available for other person does not get reduced. In case of wikipedia as well if one person try to attain any information or knowledge through wikipedia then the amount of knowledge and information available for other person does not get reduced.
• Non excludability: It means that if public good has been provided then it is not possible to exclude a person from consuming it. In case of wikipedia as well it is not possible to exclude a person to gain knowledge through this platform. Generally this non excludability cause th problem of free riding which cause market failure.

b. There are various ways to reduce free riding problem. Some of them are:

• Wikipedia should charge a very small amount from each and every consumer. Generally people do not mind to contribute a very small amount to gain knowledge and information.
• Wikipedia should set a qouta over a quantity used. For example it should set a particular quantity which a person can use without paying and once that limit ends people have to pay for any extra content.