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

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  • Kent D. Messer
  • Harry M. Kaiser
  • William D. Schulze

Abstract

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. Copyright 2008, Oxford University Press.

Suggested Citation

  • Kent D. Messer & Harry M. Kaiser & William D. Schulze, 2008. "The Problem of Free Riding in Voluntary Generic Advertising: Parallelism and Possible Solutions from the Lab," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(2), pages 540-552.
  • Handle: RePEc:oup:ajagec:v:90:y:2008:i:2:p:540-552
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.01114.x
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    Citations

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    Cited by:

    1. Swallow, Stephen K., 2013. "Demand-side Value for Ecosystem Services and Implications for Innovative Markets: Experimental Perspectives on the Possibility of Private Markets for Public Goods," Agricultural and Resource Economics Review, Cambridge University Press, vol. 42(01), pages 33-56, April.
    2. repec:spr:sochwe:v:48:y:2017:i:4:d:10.1007_s00355-017-1036-x is not listed on IDEAS
    3. Kent Messer & Jordan Suter & Jubo Yan, 2013. "Context Effects in a Negatively Framed Social Dilemma Experiment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 55(3), pages 387-405, July.
    4. Li, Tongzhe & Fooks, Jacob & Messer, Kent D., 2017. "Residents’ Preferences in Adopting Water Runoff Management Practices: Examining the Effect of Behavioral Nudges in a Field Experiment," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259127, Agricultural and Applied Economics Association.
    5. repec:spr:custns:v:4:y:2017:i:1:d:10.1007_s40547-017-0070-2 is not listed on IDEAS
    6. Zarghamee, Homa S. & Messer, Kent D. & Fooks, Jacob R. & Schulze, William D. & Wu, Shang & Yan, Jubo, 2017. "Nudging charitable giving: Three field experiments," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 137-149.
    7. Janusch, Nicholas & Palm-Forster, Leah H. & Messer, Kent D. & Ferraro, Paul J., 2017. "Behavioral Insights for Agri-Environmental Program and Policy Design," 2018 Allied Social Sciences Association (ASSA) Annual Meeting, January 5-7, 2018, Philadelphia, Pennsylvania 266299, Agricultural and Applied Economics Association.

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