Optimal institutional mechanisms for funding generic advertising: an experimental analysis

Given the uncertain legal status of generic advertising programs for agricultural commodities, alternative voluntary funding institutions are investigated that could provide a high level of benefits to producers. This experimental study simulates key economic and psychological factors that affect vo...

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Bibliographic Details
Published inAmerican journal of agricultural economics Vol. 87; no. 4; pp. 1046 - 1060
Main Authors Messer, K.D, Schmit, T.M, Kaiser, H.M
Format Journal Article
LanguageEnglish
Published 01.11.2005
Subjects
agricultural products
check-off programs
donations
economic impact
funding
generic advertising
market regulations
psychosocial factors
simulation models
trade associations
voluntary funding institutions
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Summary:Given the uncertain legal status of generic advertising programs for agricultural commodities, alternative voluntary funding institutions are investigated that could provide a high level of benefits to producers. This experimental study simulates key economic and psychological factors that affect voluntary producer contributions to generic advertising. The results suggest that producer referenda play a critical role in increasing contributions and that producer surplus is maximized by a provision point mechanism instituted by producer referendum with thresholds ranging from 68% to 90%, and expected funding from 47% to 77% of the time, depending on the level of advertising effectiveness.
Bibliography:http://chla.library.cornell.edu/c/chla/browse/title/5032826.html
ISSN:0002-9092
1467-8276
DOI:10.1111/j.1467-8276.2005.00787.x