Part 1. Free Riding Experiment
Students participate in a version of the 'classic' public good experiment in a class time dedicated to this exercise. Public goods follow the traditional economics definition of being non-rival and non-excludable. Instructors can find a number of variations to this experiment and can administer it in class or in an outside class period. A general description of the experiment is as follows.

The group of seven students are each given an initial endowment of money of $1 per round and told that they can either keep this money or confidentially donate some or all of it the Public Account. Any money donated to the Public Account is then increased by having the administrator multiply the donated money by 1.5. These funds are then distributed evenly amongst all group members - whether they originally donated to the public account or not. This experiment is then repeated for several rounds where students continue to accumulate money over the rounds. The administrator publically records the aggregate amount of money that is given by the group to the public account in each round (the individual choices remain confidential).

In this experiential learning experiment, students will discover that everyone in their group is best off if everyone contributes to the public account. However, in any individual round, the individual incentive is to not donate to the public account, keep their initial endowment of $1, and just still receive the payoff from the Public Account. By participating in this exercise, students will learn first-hand the market failure related to the free riding and how the pursuit of selfish interest in the case of public goods leads to significant societal problems.