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Under-contribution to generic advertising due to self-interested inequity aversion

Author

Listed:
  • Jura Liaukonyte
  • Timothy J. Richards
  • Harry M. Kaiser
  • Bradley J. Rickard

Abstract

We modify the behavioural postulate of self-centred inequity aversion to explain producers' reluctance to fund generic fruit and vegetable advertising as a result of experiencing negative utility when others benefit more from a public good than themselves, but positive utility when they earn more than others. We find that higher variability in returns decreases the probability of a favourable vote. Conversely, if information about payoffs is incomplete, if subjects are allowed to experience a trial run of a generic advertising programme, if returns are equal across producers, or if there is government support for the programme, the likelihood of approval rises.

Suggested Citation

  • Jura Liaukonyte & Timothy J. Richards & Harry M. Kaiser & Bradley J. Rickard, 2015. "Under-contribution to generic advertising due to self-interested inequity aversion," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 42(3), pages 473-497.
    • Handle: RePEc:oup:erevae:v:42:y:2015:i:3:p:473-497.
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    File URL: http://hdl.handle.net/10.1093/erae/jbu032
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    Cited by:

    1. Richards, Timothy J. & Liaukonyte, Jura & Streletskaya, Nadia A., 2016. "Personalized pricing and price fairness," International Journal of Industrial Organization, Elsevier, vol. 44(C), pages 138-153.

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