Status-Quo-Bias and Voluntary Contributions: Can Lab Experiments Parallel Real World Outcomes for Generic Advertising?
Many commodities have programs assessing producers for generic advertising. Ads such as "Got Milk?" and the "Incredible Edible Egg" are a public good for producers. Most of these programs originally used the Voluntary Contribution Mechanism, but have now become mandatory because of free-riding. This research simulates both the economic and psychological details of the egg industry in experiments that produce strikingly realistic results. Because mandatory programs have recently been declared unconstitutional, we also the test the Provision Point Mechanism and show that observed low levels of free-riding for both mechanisms are the result of status quo bias.
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