Managerial Economics

Managerial Economics – Personal Learning Paper

Economics of free riding in group assignments at XLRI

INTRODUCTION

Free riding in group assignments is a fairly common problem at XLRI. Free riding refers to the act of not contributing efforts or contributing relatively less to an assignment for which the entire group gets the same marks.

Benefits of free riding to a student include additional time for studying to increase relative scores and also additional time for rest and recreational activities.

Negative impacts of free riding to an individual include

1. Bad reputation of being a free rider.

2. Poor qualities of assignments as group assignments in which all group members work are expected to be better than assignments with free riders.

3. Repeated free riding would result in being stuck with a group of free riders in future courses where the situation is such that if everyone continues to free ride all will pay a huge penalty in terms of marks. In such a situation even if a free rider wants to work for marks the effort required in such a group would be much higher than in a normal group since others in the group can still be expected to free ride.

OBJECTIVES

The objective of this paper is to analyze the conditions under which it is beneficiary for a person to free ride in group assignment and what an optimal strategy to free ride at XLRI. This is an application of game theory wherein an attempt is being made to find a dominant strategy.

METHODOLOGY

An individual has the option to work hard (h), normal (n) or free ride (f). He gains reputation for working hard and loses reputation for free riding. A good reputation lowers the cost of free riding when he really needs it. A person is assumed to be in one of three conditions low workload (l), medium workload (m) and busy (b). Payoffs to working under these conditions differ. Under these conditions a person is studied to find an optimal strategy which can be used to decide when to...