By contrast, you can exclude someone from buying an iPhone. This makes a highway a non-excludable good. For example, you cannot exclude someone from using a highway. Non-exclusion means that everyone can use the good and those who do not pay cannot be excluded from enjoying the benefits. In order for a good to be considered a public good it must meet two criteria (1) non-exclusion, and (2) shared consumption (non-rivalry). However, punishing free-riders could lead to exclusion, which would make it a non-public good. There are two ways that the government can solve the free-rider problem, (1) they can find new ways to punish free-riders or (2) they can tax all citizens that are eligible to use public goods and use the tax revenue to fund public goods and services. Therefore the market is relatively useless since there's no pricing structure. This is considered a type of market failure, since the unregulated market fails to perfectly allocate the resource to consumers since no matter how much you're willing to pay, you can consume a theoretically infinite quantity. This occurs when fairness is not upheld in the distribution process. When some individuals consume more of a shared resource or pay less towards the costs of that resource than they should, it results in an inefficient distribution of goods or services. Thus, all public goods will experience the free-rider problem. For example, you can't force people to pay to enter a public park, you can just go. The free-rider problem is a paradox since if there are no free-riders, the product is by definition not fully public because a public good must be non-excludable, meaning someone who doesn't pay cannot be barred from the benefits. The free-rider problem is a problem in economics that with a public-good, many will consumer more of their fair share or pay less of their share of the costs.

Public good free rider problem