Journal Article

The Problem of Free Riding in Voluntary Generic Advertising: Parallelism and Possible Solutions from the Lab

Kent D. Messer, Harry M. Kaiser and William D. Schulze

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 90, issue 2, pages 540-552
Published in print May 2008 | ISSN: 0002-9092
Published online May 2008 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.1111/j.1467-8276.2007.01114.x
The Problem of Free Riding in Voluntary Generic Advertising: Parallelism and Possible Solutions from the Lab

Show Summary Details

Preview

Producers of many commodities pay for generic advertising, which is a public good for producers and, in cases like healthy foods, enhances social welfare. Though most programs were initially funded through the Voluntary Contribution Mechanism, many became mandatory to mitigate free riding. This experimental research simulates key economic and psychological details of these programs and produces donation results strikingly similar to a historic example. Because mandatory programs may be declared unconstitutional, the Provision Point Mechanism is tested as an alternative. This research also shows that refund-by-request donation mechanisms establish a status quo of contributing and reduce free riding.

Keywords: experimental economics; generic advertising; provision point; status quo bias; voluntary contributions; H410; M370

Journal Article.  6740 words.  Illustrated.

Subjects: Publicly Provided Goods ; Marketing

Full text: subscription required

How to subscribe Recommend to my Librarian

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.