Voluntary funding for generic advertising using a provision point mechanism: An Experimental Analysis of Option Assurance

Date

2007

Authors

Messer, Kent D
Kaiser, Harry M
Poe, Gregory

Journal Title

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Volume Title

Publisher

Wiley-Blackwell

Abstract

The mandatory nature of check-off programs remains a contentious policy issue. A provision point mechanism with a money-back guarantee offers an attractive, alternative voluntary funding approach, yet faces the problem of how to maintain future administrative capacity should contributions fall short of the funding threshold in the present period. To address this concern, a novel two-threshold, provision point mechanism is tested that sets a high threshold to fund marketing and a low threshold, if necessary, to secure administrative capacity for future advertising. Experimental results demonstrate that providing such "option assurance"sustains high overall contributions and, in some settings, can increase producer surplus.

Description

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Citation

Source

Review of Agricultural Economics

Type

Journal article

Book Title

Entity type

Access Statement

License Rights

DOI

10.1111/j.1467-9353.2007.00375.x

Restricted until

2037-12-31