In economics, what problem occurs when people benefit from a shared resource without paying for it?

In economics, the problem that occurs when people benefit from a shared resource without paying for it is called the free-rider problem.

A free rider receives benefits while avoiding the costs of contributing. The issue is especially important for public goods, because non-excludability makes it difficult to prevent non-payers from enjoying the benefits. National defense, clean air, and some forms of basic research are common examples discussed by economists.

If many people expect others to pay, voluntary contributions may be too small to provide the socially efficient amount. This is a collective-action problem rather than simply an individual moral judgment. Governments can respond through taxation, regulation, or compulsory contributions, although those solutions involve their own design and enforcement questions.

The free-rider problem differs from moral hazard. Moral hazard involves changing behavior after protection or insurance reduces exposure to risk. Adverse selection concerns hidden information before an agreement. All three concepts involve incentives or information, but they describe different economic mechanisms.