Alice and Bob plan to go to the movies. They both like movies with a good plot and a lot of suspense. But they know nothing about the films presently showing. They decide that by the next day they will both try to find out some information. As it turns out, though, neither made much of an effort. Both hoped the other might; and neither wanted the other to free-ride on their effort. They end up picking a movie quite randomly.

The public good nature of information may lead to free-riding and inefficiently low levels of research. This is used as an argument in favor of such different policies as patent laws or banking supervision. Learn more in Chapter 6 of Information Economics.