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World Trade Organization - Principles of the trading system
1 #'Reciprocity'. It reflects both a desire to limit the scope of Free rider problem|free-riding
that may arise because of the MFN rule, and a desire to obtain better access to foreign
markets. A related point is that for a nation to negotiate, it is necessary that the gain from doing so be greater than the gain available from unilateralism|unilateral liberalization;
reciprocal concessions intend to ensure that such gains will materialise.B. Hoekman, The
WTO: Functions and Basic Principles, 43
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Open source - Alternatives
1 * For own use - Businesses or individual software developers often create software to
solve a problem, bearing the full cost of initial creation. They will then open source
the solution, and benefit from the improvements others make for their own needs. Communalizing the maintenance burden distributes the cost across more
users; free rider problem|free riders can also benefit without undermining the creation
process.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Competition law - Neo-classical synthesis
1 Sources of this market power are said to include the existence of
externalities, barriers to entry of the market, and the free rider problem
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
MyCityDeal - Collective buying business model
1 In doing so, users or consumers are protected from the free rider problem where
individuals looking for a free ride ride the discounted savings of others who paid to
bring the deal-of-the-day to the actualization
threshold.[http://www.mycitydeal.co.uk/how-does-mycitydeal-work How It Works]
MyCityDeal Rather, users are only charged when the required number of people sign
up.https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Assurance contract
1 An 'assurance contract', also known as a 'provision point
mechanism', is a Mechanism design|game theoretic mechanism and a
Financial engineering|financial technology that facilitates the
voluntary creation of public goods and club goods in the face of the free
rider problem.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Assurance contract
1 The free rider problem is that there may be actions that would benefit a large group of people, but once the action is taken, there is no way to exclude those who did not pay for
the action from the benefits
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Brainstorming - Sources of brainstorming inadequacy
1 On the other hand, the variations on brainstorming that produce the social
matching effect would necessarily violate Osborn's principle of focus on quantity while those that produce the
free rider problem and evaluation apprehension would necessarily
violate defer judgment
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Free rider problem
1 Free riding may be considered as a 'free rider problem' when it leads to under-provision of goods or services,
or when it leads to overuse or degradation of a common property
resource
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Strategic alliance - Disadvantages
1 * Agency costs: As the benefit of monitoring the alliance's activities effectively is not fully captured by
any firm, a free rider problem arises (the free rider problem seems to be
less pronounced in settings with multiple strategic alliances due to
reputational effects).
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Tragedy of the commons - Garrett Hardin's essay
1 Overall, Hardin argues against relying on conscience as a means of policing commons, suggesting that this favors selfish individuals– often known as Free rider problem|free riders– over those who are more
altruistic
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Global public good - Challenges to the traditional definition
1 Such a company, then, becomes a corporate free rider problem|free rider, driving up the cost of the
public goods of clean air and water, which are often Transnationality|
transnational resources.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Homo economicus - Responses
1 Free rider problem|Free riders, for example, would have a major
negative impact on the provision of public goods
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Public good
1 Public goods problems are often closely related to the Free rider
problem|free-rider problem, in which people not paying for the good may continue to access it, or the tragedy of the commons, where consumption of a shared resource by individuals
acting in their individual and immediate self-interest diminishes or even destroys the original resource
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Public good - The free rider problem
1 This is called the free rider problem, or occasionally, the easy rider problem (because consumers'
contributions will be small but non-zero)
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Public good - The free rider problem
1 The free rider problem depends on a conception of the human being as homo economicus: purely rational and also purely selfish—extremely
individualistic, considering only those benefits and costs that directly affect him or her. Public goods give such a
person an incentive to be a free rider.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Public good - Privileged group
1 The existence of privileged groups may not be a complete solution to the free rider problem, however, as underproduction of the public good
may still result
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Public good - Merging free riders
1 Another method of overcoming the free rider problem is to simply
eliminate the profit incentive for free riding by buying out all the potential
free riders
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Public good - Introducing an exclusion mechanism (club goods)
1 Although they can address the free rider problem, the downside of these
laws is that they imply private monopoly power and thus are not
Pareto-optimal.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Private good
1 Unlike public goods, private goods are less likely to have the free rider problem
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Environmental economics - Common goods and public goods
1 A country's incentive to invest in carbon abatement is reduced
because it can Free rider problem|free ride off the efforts of other
countries
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Web 2.0 - Characteristics
1 The impossibility of excluding group members who don’t contribute to the
provision of goods from sharing profits gives rise to the possibility
that serious members will prefer to withhold their contribution of effort and Free rider problem|free ride on
the contribution of others.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Environmental policy - Rationale
1 The free rider problem is when the private marginal cost of taking action to protect the environment is greater
than the private marginal benefit, but the social marginal cost is less
than the social marginal benefit
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Labor rights
1 Labor counters that the open shop leads to a free rider problem.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Social movements - Dynamics of social movements
1 One of the main difficulties facing the emerging social movement is
spreading the very knowledge that it exists. Second is overcoming the free rider problem - convincing people to
join it, instead of following the mentality 'why should I trouble
myself when others can do it and I can just reap the benefits after their
hard work'.https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Social movements - Framing perspective
1 In doing so, this general cultural approach also attempts to address the Free rider problem|free-rider
problem
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Externality - Implications
1 Positive externalities are often associated with the free rider
problem
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Collective action - Exploitation of the great by the small
1 Poorer individuals will usually have little choice but to opt for the Free
rider problem|free rider strategy, i.e
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Index of economics articles - F
1 * Factor price equalization – Factors of production – Fair trade – Feminist
economics – Finance – Financial astrology – Financial capital –
Financial economics – Financial instrument – Fiscal policy – Fisher
equation – Fisher separation theorem – Forecasting – Fractional-reserve banking – Free good – Free rider
problem – Free trade – Friedman rule – Full-reserve banking
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Colonization of Phobos - Objections
1 The fundamental problem of public things, needed for survival, such as
space programs, is the free rider problem
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Inequity aversion - Punishing unjust success and game theory
1 Without IA's rejection of injustice, stable cooperation would be harder
to maintain (for instance, there would be more opportunities for
successful free rider problem|free riders).http://epub.ub.uni-muenchen.de/726/1/Fehr-Schmidt_Handbook_2005-
Munichecon.pdf
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Microeconomics - Externalities and market failure
1 This period also marks the beginning of mathematical modeling of public
goods with Paul Samuelson|Samuelson's “The Pure Theory of
Public Expenditure” (1954), in it he gives a set of equations for efficient provision of public goods (he called
them collective consumption goods), now know as the Samuelson condition. He then gives a
description of what is know called the free rider problem:
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Journal of Political Economy - Notable papers
1 :: ... suggested Tiebout model|non-political solutions to the free rider
problem in local governance.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Alternative compensation system
1 Other models, such as the street performer protocol or voluntary
collective licenses, could arguably be called alternative compensation systems although they are very
different and generally less effective at solving the free rider problem.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Lindahl tax - Demand revelation
1 The Demand Revelation theory uses the Clarke tax or pivot mechanism,
to ensure that individuals will consider the fact that their choices
have a social cost on the social outcome, thus ensuring that they
truthfully reveal their preferences,and hence overcoming
the free rider problem of public goods
provisioning.[http://www.progress.org/fold183.htm Fred Foldvary on
Demand Revelation: Better than Voting]
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Affordable Care Act - Background
1 It was championed for a time by conservative economists and
Republican Party (United States)|Republican senators as a market-
based approach to healthcare reform on the basis of individual
responsibility and avoidance of free rider problems
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Affordable Care Act - Healthcare debate, 2008–10
1 With universal health care|universal healthcare as one of the stated goals of the Obama
administration, congressional Democrats and health policy experts like Jonathan Gruber (economist)|Jonathan Gruber and David Cutler argued that
guaranteed issue would require both community rating and an individual mandate to ensure that adverse selection and/or Free rider problem|free
riding would not result in an Death spiral (insurance)|insurance death spiral; they convinced
Obama that this was necessary, and persuaded him to accept congressional proposals that included a
mandate
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Affordable Care Act - Insurance exchanges and the individual mandate
1 These regulations are enabled to function due to the #Overview of
provisions|individual mandate — the requirement to buy insurance or pay
a penalty—and the limits on open enrollment, without which healthy
people might Free rider problem|put-off insuring themselves until they got
sick
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Moody's - 1970s to 2000
1 As well, the major agencies began charging the issuers of bonds as well as investors mdash; Moody's began doing this in 1970 mdash; thanks in part to a growing free rider problem related to the increasing availability
of inexpensive Photocopier|photocopy machines, and the
increased complexity of the financial markets
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Opportunism - Game theory
1 Two classic cases discussed in game theory where opportunism is often involved are the free rider problem
and the prisoner's dilemma.Reinhard Bachmann and Akbar Zaheer (eds.),
Handbook of trust research
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Credit rating agency - Post-depression era
1 In the late 1960s and 1970s, ratings were extended to commercial paper and Deposit
account|bank deposits. Also during that time, major agencies changed their business
model by beginning to charge bond issuers as well as investors. Reasons for this change included a growing free rider problem related to the increasing availability of inexpensive Photocopier|photocopy machines, and the
increased complexity of the financial markets.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Signalling theory - Costly signalling in hunting
1 2000Hawkes 1993 Instances that are particularly inconsistent with the delayed
reciprocity hypothesis are those in which a hunter shares his kill indiscriminately with
all members of a large group.Wiessner 1996 In these situations, the individuals sharing meat have no control over whether or not their generosity will be reciprocated, and Free rider problem|free riding becomes an
attractive strategy for those receiving meat
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Right-to-work law - Opponents
1 This creates a free rider problem[http://www.ipspr.sc.edu/grs/SCCEP/Articles/interest_groups_in_south_carolin.htm The South Carolina
Governance Project— Interest Groups in South Carolina,] Center for
Governmental Services, Institute for Public Service and Policy Research,
University of South Carolina, Accessed July 6, 2007
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Union shop - Canada
1 Rand went further to argue that the free rider problem undermines
workplace order by causing resentment between union and non-
union employees.Kaufman, p
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Union security agreement - Rationale
1 ISBN 0-912051-02-7 There are alternative solutions to the free rider problem in labor
relations
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Parable of the broken window - Defenses
1 One prominent example are public goods which are prone to the free
rider problem and hence are subject to their over or under production.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Squeeze out - Process
1 Hence the acquirer is able to capture almost all the value added from the
merger and, as in the leveraged buyout, is able to effectively
eliminate the free rider problem
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Commercial use of copyleft works - Development
1 Thus avoiding a type of free rider problem.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
The Federal Reserve Act - Implications and Impacts of the Federal Reserve Act
1 [http://www.jstor.org/stable/2601371 Origins of the Federal Reserve
System: International Incentives and the Domestic Free Rider Problem
International Organization, Winter, 1999] The absence of a central
banking structure in the U.S
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Participatory economy - Critique of markets
1 Ambiguity over who has the property right, polluters or pollution victims, free rider
problems among multiple victims, and the transaction costs of forming and maintaining
an effective coalition of pollution victims, each of whom is affected to a small but unequal
degree, all combine to render market systems incapable of eliciting accurate information
from pollution victims about the damages they suffer, or acting upon that information even if
it were known.Robin Hahnel, (2004)
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Advocacy groups - Benefits and incentives
1 Known as the free rider problem, it refers to the difficulty of obtaining members of a particular interest
group when the benefits are already reaped without membership
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Minarchism - Ideology
1 Some minarchists support taxation on principle or see it as a Lesser of two evils principle|necessary evil to
address the free rider problem, while others believe it is morality|morally
wrong
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Private defense agency - Financing of private defense agencies
1 Specifically, the free rider problem, in which people refuse to pay for
defense but instead rely on their neighbors to pay for defending the
community, is said to make it inevitable that it be financed by
taxes if an equitable allocation of costs is to be achieved
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Free-market roads - Private roads can have no free riders, reducing congestion
1 The free rider problem has been cited by some proponents as a
reason for privatizing roads: since traffic congestion is the result of
excess demand for transportation infrastructure, it may be treated as
any other economic shortage - in this case, a shortage of roads, lanes,
exits, or other infrastructure
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
The Logic of Collective Action - Overview
1 The book argues instead that individuals in any group attempting collective action will have incentives to Free rider problem|free ride on the
efforts of others if the group is working to provide public goods. Individuals will not “free ride” in
groups which provide benefits only to active participants.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Vaccination policy - Individual versus group goals
1 Governments often allow exemptions to mandatory vaccination for
religious or philosophical reasons, but if too many of these exemptions are granted, the resulting free rider
problem may cause loss of herd immunity, substantially increasing
risks even to vaccinated individuals.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Health care in the United States - Prescription drug prices
1 position (consistent with the primary lobbying position of the
Pharmaceutical Research and Manufacturers of America) is that the
governments of such countries are free rider problem|free riding on the
backs of U.S
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Communications Workers of America v. Beck - Further Supreme Court rulings
1 Writing for the majority, Justice Blackmun established a three-prong test for
determining the constitutionality and statutory legality of agency fee charges in public employee bargaining units: 1) The charges must be germane to collective
bargaining activity; 2) The charges must not significantly burden the non-members' free
speech rights; and 3) Charges must be justified by the need for labor peace or to
avoid the free rider problem.Lehnert v
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
AUSFTA - Pharmaceutical Benefits Scheme
1 While the scheme is very effective at keeping many drug prices low, pharmaceutical
corporations in both the US and Australia are wary of the operation of the scheme, since
they argue that higher drug prices are necessary to fund the costs of research and development. The American pharmaceutical companies claim that in enjoying low-cost medicines, Australians are essentially Free
rider problem|free riding on the costs of research performed in the U.S.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Americans with Disabilities Act - Abuse
1 As one law review article pointed out, the perception that the ADA primarily helps free rider problem|freeloaders
was harshly satirized by The Onion in 1998 in the form of an article about
the Americans With No Abilities Act.Gina M
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Balance of power (international relations) - Buck passing and bloodletting
1 Some realists believe there is a strong tendency to buck-pass or Free rider
problem|free-ride within balancing coalitions themselves, usually leaving their alliance partners to assume the heavy burden of
wearing down the enemy, leaving the free-rider’s military fresh to win the final battles
of the war and thus be in a better position to dictate the peace, such as the UK’s light involvement in the early stages of World
WarIhttps://store.theartofservice.com/the-free-rider-problem-toolkit.html
TANSTAAFL - Meanings
1 (See Free rider problem and Tragedy of the commons.)
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Co-operation (evolution) - Direct Fitness Benefits
1 Cooperation is maintained in situations where Free rider problem|
free-riding is a problem through enforcement, which is the
mechanism where the actor is rewarded for cooperating or punished for not cooperating
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
FELDA - Scheme management
1 However, the settlers did not prefer this scheme, as workers who did not
tend to the land properly still benefited (a sort of free rider
problem)
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Fallacy of composition - Examples
1 In the free rider problem, an individual can benefit by failing to pay when consuming a share of a public good; but if there are too
many such free riders, eventually there will be no ride for anyone.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Net bias - Concerns about political discrimination
1 Many ISPs contend that major content providers such as Google or Yahoo! enjoy a Free rider problem|
free ride
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Public goods game - Results
1 Depending on the experiment's design, those who contribute below
average or nothing are called defectors or free rider problem|free
riders, as opposed to the contributors or above average contributors who are called cooperation|cooperators.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Public goods game - Income variation
1 A public goods games variant suggested as an improvement for researching the
free rider problem is one in which endowment are earned as Household
income|income. The standard game (with a fixed initial endowments) allows no
work effort variation and cannot capture the Marginal rate of substitution|marginal
substitutions among three factors: private goods, public goods, and leisure.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Public goods game - Implications
1 Part of the economic theory of public goods is that they would be under-provided (at a rate lower than the
‘social optimum’) because individuals had no private motive to contribute
(the free rider problem|free rider problem)
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Social loafing
1 Social loafing can be explained by the free rider problem|free-rider theory and the resulting sucker effect, which is an individual’s
reduction in effort in order to avoid pulling the weight of a fellow group
member.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Social loafing - Motivational strategies
1 'Minimize free riding:' Free rider problem|Free riding occurs when
members do less than their share of the work because others will make
up for their slack
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
WTO - Principles of the trading system
1 # 'Reciprocity'. It reflects both a desire to limit the scope of Free rider problem|free-
riding that may arise because of the MFN rule, and a desire to obtain better access to foreign markets. A related point is that for a nation to negotiate, it is necessary that the gain from doing so be greater than the gain available from unilateralism|unilateral liberalization;
reciprocal concessions intend to ensure that such gains will materialise.B. Hoekman, The
WTO: Functions and Basic Principles, 43
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Economics of climate change mitigation - Heterogeneity
1 Nations that avoid mitigation can benefit from free rider problem|free-riding on the actions of others, and
may even enjoy gains in trade and/or investment (Halsnæs et al.,
2007:127)
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Leech (computing)
1 In computing and specifically Internet, a 'leech' is one who
benefits, usually deliberately, from others' information or effort but does not offer anything in return, or makes only token offerings in an attempt to
avoid being called a leech. In economics, this type of behavior is called free riding and is associated
with the free rider problem.https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Solidarity lending - Distinctiveness
1 * small enough to ensure a maximum level of joint responsibility and
discourage free rider problem|free riders, and
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Signalling (economics) - Assumptions and groundwork
1 Bad employees aren't upset about this, because they get a free rider
problem|free ride from the hard work of the good employees
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Eurobonds
1 Because Eurobonds would allow already highly indebted states access
to cheaper credit thanks to the strength of other Eurozone
economies, they are controversial, and may suffer from the free rider
problem.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Eurobonds - Critics
1 The planned introduction of Eurobonds has been criticised by economists for economic reasons
such as the Free rider problem or Moral Hazard.[http://www.voxeu.org/index.php?q=node/6899 voxeu.org] Beside economic grounds, mainly
legal and political reasons are mentioned which could prohibit the introduction of Eurobonds:
Article 125 of the Lisbon Treaty states explicitly that the European Union and its member states
are not liable for the commitments of other members
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
History of citizenship - Civic-republican view
1 A general problem with this conception, according to critics, is
that if this model is implemented, it may bring about other issues such as the free rider problem in which some
people neglect basic citizenship duties and consequently get a free ride supported by the citizenship
efforts of others
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Rodney Stark - On the growth of Christianity
1 This is consistent with Stark's published observations of
contemporary religious movements, where once-successful faith
movements gradually decline in fervor due to the free rider problem.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Financial core - Impact
1 Opponents of the decision to declare financial core status note that it weakens the union which
won the benefits enjoyed by all workers, even those not bound by union rules. Some claim
that financial core members are essentially free rider problem|free riders. However, fi-core
workers still pay the majority of union dues; for example, the Financial Core Status deduction for
non-members of the Writers Guild of America, West over April 2013–March 2014 was 12.10%
less than the regular dues.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Vaccine controversy - Individual liberty
1 Exempting some people from mandatory vaccination results in a free rider problem, in which a few individuals gain the advantage of herd immunity without paying the cost; too many exemptions may
cause loss of herd immunity, substantially increasing risks even to
vaccinated individuals.
https://store.theartofservice.com/the-free-rider-problem-toolkit.html
Box-Office Bunny - Plot
1 The would-be Free rider problem|free rider stumbles on the usher, Elmer.
To divert attention from his own illegal entry, Daffy drives Elmer to further focus on Bugs. He also join
forces with him against Bugs.
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