In February 2015, New Orleans citizen Sidney Torres privately started the French Quarter Task Force an off-duty police patrol in New Orleans, patrolling a four block radius with brightly painted Polaris vehicles (now Smart cars) in the heart of the French Quarter. He independently spent over $300,000 to get the project up and running for four months. Torres had subsequently hoped that businesses in the French Quarter that were benefitting significantly from the additional police force would contribute to his mission to make the French Quarter safer.
However, Torres encountered a version of the prisoner's dilemma we looked at in class on Tuesday. Because the businesses in the area had a dominant strategy to not contribute and would still benefit from Torres' independent efforts, Torres fell into the trap of the free rider problem and couldn't continue to operate the Task Force solely on his own. Thus, he found a role for government. In October, voters in New Orleans approved a quarter cent increase in the sales tax for the French Quarter that allowed the City of New Orleans to take over the Task Force both administratively and financially and it has been operating (mostly) successfully ever since. This is a classic example of the role for government in solving the free rider problem and providing public goods.
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