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Status-Quo-Bias and Voluntary Contributions: Can Lab Experiments Parallel Real World Outcomes for Generic Advertising?

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

Abstract

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.

Suggested Citation

  • Messer, Kent D. & Kaiser, Harry M. & Schulze, William D., 2004. "Status-Quo-Bias and Voluntary Contributions: Can Lab Experiments Parallel Real World Outcomes for Generic Advertising?," 2004 Annual meeting, August 1-4, Denver, CO 20072, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20072
    DOI: 10.22004/ag.econ.20072
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    Cited by:

    1. Kent D. Messer & Harry M. Kaiser & Gregory L. Poe, 2007. "Voluntary Funding for Generic Advertising Using a Provision Point Mechanism: An Experimental Analysis of Option Assurance," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(3), pages 612-631.
    2. Kent D. Messer & Todd M. Schmit & Harry M. Kaiser, 2005. "Optimal Institutional Mechanisms for Funding Generic Advertising: An Experimental Analysis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1046-1060.
    3. Norwood, F. Bailey, 2005. "Can Calibration Reconcile Stated and Observed Preferences?," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 37(1), pages 1-10, April.

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    More about this item

    Keywords

    Marketing;

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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