What is one?

The general public uses different resources but all not always end up paying for. This kind of situation a often ends in a problem caused by such as the number of people using the service, the number of people pay unnecessary financial constraint on the organization providing the service, predominates on the service. This is referred to as a "free rider problem". To solve this problem, one enters the picture.

One is a financial agreement that sees it, which all are to pay the people who use the service with ensuring. Generally refers to the term "Free ride" for these groups of people who use a service, without actually having to pay or make only a marginal payment instead of the amount actually on per head be paid. Free-riding problem ends always a big problem, when it starts leading to see production effects on the production of public goods and thus, and in some cases a cease-fire in the production not more viable continue to produce that is public goods. The entire agenda of one is the "free riders" put an end to areas, so that public goods continue to be a financially viable proposition.
One sees, not to encourage "free riders" and only the people who pay the service end up using the service. Once the contract is then all people are obliged to pay for them and there is no escape. Free-riding problem has as a game theoretical problem was called, since during the instances if appropriate action is then all the paying members, stand to gain. During the instances when not all the individual payments make waste of resources, is the in under production. This entire set up ends the actual cost to pay in reducing the utility per person, paid as the cost is a fraction of, what.
Assurance contract functions on the premise that "x" number of people agree to a specific action of "y" amount pay, if the expected contribution is reached. If is the contribution of a particular pre-decided date then the public probably all people will be offered, who had contributed in the first place. And if not achieve the expected contribution amount all parties which would have made the payment is refundable to the expected date, then the amount. If that contributed exceeds goal decides the group as the amount to distribute. Can they share exceeded the amount and parts of it per capita and refund it or they can choose, provide better public goods.
One can be compelled to by a private organization or by the Government. Bagnoli and Lipman were the first to describe assurance contract in 1989. Assurance contract given preference as the public, is due in decisions on resources from the public without forced conversions used involved can cause.
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