Question

What is the term for the phenomenon where consumers are unwilling to reveal their Willingness to Pay (WTP) for a public good because they can still benefit from it even if purchased by someone else?

A) Preference Concealment
B) Free-Rider Phenomenon
C) Nonrevelation of Preferences
D) Public Good Dilemma

Answer 1

The Free-Rider Phenomenon is the term for consumers unwilling to reveal their Willingness to Pay (WTP) for a public good because they can still benefit from it even if purchased by someone else.

Step-by-step explanation:

The phenomenon where consumers are unwilling to reveal their Willingness to Pay (WTP) for a public good because they can still benefit from it even if purchased by someone else is called the Free-Rider Phenomenon.

It refers to individuals who want others to pay for the public good and then plan to use the good themselves. When many people act as free riders, the public good may never be provided.

An example of this is when people avoid paying for a subscription service like Netflix because they can use someone else's account for free.