Editing Free-rider problem (section)

====Fundraising====
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A minor alternative, especially for information goods, is for the producer to refuse to release a good to the public until payment to cover costs is met. For instance, [[Stephen King]] authored chapters of a new novel downloadable for free on his website while stating that he would not release subsequent chapters unless a certain amount of money was raised. Sometimes dubbed ''holding for ransom'', this method of public goods production is a modern application of the [[street performer protocol]] for public goods production. Unlike assurance contracts, its success relies largely on social norms to ensure (to some extent) that the threshold is reached and partial contributions are not wasted.

One of the purest Coasian solutions today is the new phenomenon of Internet [[crowdfunding]],<ref>{{Cite web |title=Crowdfunding: What It Is, How It Works, and Popular Websites |url=https://www.investopedia.com/terms/c/crowdfunding.asp |access-date=2024-07-01 |website=Investopedia |language=en}}</ref> in which case rules are enforced by computer algorithms and legal contracts, as well as social pressure.  For example, on the [[Kickstarter]] site, each funder authorizes a credit card purchase to buy a new product or receive other promised benefits, but no money changes hands until the funding goal is met.<ref name=kick>{{cite web |title=Kickstarter FAQ |url=https://www.kickstarter.com/help/faq/kickstarter+basics?ref=faq_nav#Kick |access-date=17 February 2014 |archive-url=https://web.archive.org/web/20140226050118/https://www.kickstarter.com/help/faq/kickstarter+basics?ref=faq_nav#Kick |archive-date=26 February 2014 |url-status=live |df=dmy-all }}</ref> Because automation and the Internet greatly reduce the transaction costs for pooling resources, project goals of only a few hundred dollars are frequently crowdfunded, far below the costs of soliciting traditional investors.