The Private Provision of Public Goods: Tests of a Provision Point Mechanism for Funding Green Power Programs

This paper utilizes laboratory and field experiments to test the use of a provision point mechanism to finance renewable energy programs, commonly known as green pricing programs. The mechanism solicits discrete contributions towards a provision threshold using a money-back guarantee for insufficient contributions and extended benefits for contributions in excess of the threshold. In the laboratory, a single shot environment with a large group of potential participants produces contribution levels that are found to be partially demand revealing as well as motivated by altruism or wann-glow. Also, in contrast to most green pricing programs, relatively high participation is found in the field. Field participation is shown to be responsive to program goals and the provision point mechanism.

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Working or Discussion Paper
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JEL Codes:
H41 Public Goods; C92 Design of Experiments; Laboratory; Group Behavior; C93 Design of Experiments; Field Experiments
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 Record created 2017-04-01, last modified 2018-01-22

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