Wikipedia is one of the biggest privately provided public goods in existence today. With 40 Million users, the site’s information is freely accessible to anyone with internet access and non-rivalrous in nature.
A few day ago, I clicked on a Wikipedia article and was greeted with a message
pleading for a donation to “defend Wikipedia’s independence”. All I had to do was give them $2.75 or the “price of a cup of coffee”. The company claims that they depend on donations to stay alive and that 98% of their users don’t give and instead “look the other way”. As to be expected, Wikipedia falls victim to the free rider problem due to its extremely large user base, for which each user is reluctant to contribute. Wikipedia tries to guilt the 98% of free riders into giving to their cause, delivering a personalized message describing the “heart and soul” of the Wikipedia community. While there are many free riders, their message falsely indicates their stance of financial desperation, implying that their quantity of contributions is much lower than the socially optimal quantity.
In fact, Wikipedia has largely been able to overcome the free rider problem since some users care much more than others. Since its inception, Wikipedia has grown rapidly into a multi Billion dollar company. Contributions are largely from tech companies and big corporate sponsors. For example, Amazon donated 1 million dollars in 2019 as the Amazon Alexa device sources its information from Wikipedia. Nevertheless, Wikipedia targets the altruistic nature of its free riders, trying to guilt them into donating and convince them that their donations really do make a difference. Now, any rational individual, even if they were to believe Wikipedia’s desperate need for money, would realize that the marginal cost of a $2.75 donation would be vastly greater than the expected marginal benefit of donating the $2.75 that made the difference in Wikipedia’s survival. Thus by appealing to a notion of fairness and financial desperation, Wikipedia hopes to raise peoples’ perceived total benefit above the marginal cost of donation (E[MB] + utility from fairness/equity + utility from helping a struggling business > MC). Maybe I would have donated had I not known of Wikipedia’s true financial state, as for now, I think I’ll hold onto my coffee money.
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