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The Private Provision of Public Goods: Tests of a Provision Point Mechanism for Funding Green Power Programs

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  • Rose, Steven K.
  • Clark, Jeremy
  • Poe, Gregory L.
  • Rondeau, Daniel
  • Schulze, William D.

Abstract

This paper utilizes laboratory and field experiments to test the use of a provision point mechanism to finance renewable energy programs, commonly known as green pricing programs. The mechanism solicits discrete contributions towards a provision threshold using a money-back guarantee for insufficient contributions and extended benefits for contributions in excess of the threshold. In the laboratory, a single shot environment with a large group of potential participants produces contribution levels that are found to be partially demand revealing as well as motivated by altruism or wann-glow. Also, in contrast to most green pricing programs, relatively high participation is found in the field. Field participation is shown to be responsive to program goals and the provision point mechanism.

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Bibliographic Info

Paper provided by Cornell University, Department of Applied Economics and Management in its series Working Papers with number 127699.

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Date of creation: Oct 1999
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Handle: RePEc:ags:cudawp:127699

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Keywords: public goods; provision point; green pricing; renewable energy; experiments; free riding; altruism.; Public Economics; Resource /Energy Economics and Policy; H41 Public Goods; C92 Design of Experiments; Laboratory; Group Behavior; C93 Design of Experiments; Field Experiments;

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