Question

I am sure you have heard musicians performing on NYC subway platforms.

Do these performers face a free-rider problem? If yes, how do they try to reduce this problem?

Answer 1

Yes, I have heard about musicians performing on NYC subway platforms, also I have seen them & performers like The Meetles, Streetmule or The Saw Lady are my favorite.

To know if these performers face a free rider problem which later leads to market failure, we first need to understand what is free rider problem is?

The Free Rider Problem occurs when an individual or a group receives the benefit of a good (generally a public good) but avoids paying for it. It is a problem because public goods are neither excludable nor rivalrous which means people cant be stopped by using these goods & it is there choice whether they opt for paying it for or not. True free rider scenerio occurs when there is no way to limit the free riders (consumers) from accessing to the (free) product.

Let's come to the musicians performing on NYC subway platforms. Questions to be raised

1. Do musicians need to pay for performing? A. No, in NYC the permit is free of cost. That means they are consuming the subway platforms free of cost.
2. How many street musicians perform in NYC subway platform? A. Acc. to MTA, there are 228 artists registered (hand picked to perform in 30 most popular subway spots). Although anyone can play in the subway as long as they follow MTA’s Transit Rules of Conduct. So sample size is not as large as compared to 2.4 million people ride subway daily on an average.

In this case market failure occurs when

• No public giving money to performers, all are using it freely
• No one can limit anyone else's consumption
• And because of above two no one using private entertainment performances of artists.

But practically speaking musicians get paid because there is demand of it as consumers like it after there hard day at work. They get rejuveneted after hearing it. Even out of millions of people, some people give couple of dollars to them. Performers get good amount of money. Neither there is unlimited consumption because of crowd in subway.

So, there is no possibility of true free ride problem scenerio, because of above said reasons.