TY - JOUR
T1 - Voluntary funding for generic advertising using a provision point mechanism: An Experimental Analysis of Option Assurance
AU - Messer, Kent D
AU - Kaiser, Harry M
AU - Poe, Gregory
PY - 2007
Y1 - 2007
N2 - 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.
AB - 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.
U2 - 10.1111/j.1467-9353.2007.00375.x
DO - 10.1111/j.1467-9353.2007.00375.x
M3 - Article
SN - 2040-5790
VL - 29
SP - 612
EP - 631
JO - Review of Agricultural Economics
JF - Review of Agricultural Economics
IS - 3
ER -