By: Kassas, Bachir ; Palma, Marco A. ; Hall, Charles R.
The consistent appeals against mandatory checkoff programs stimulated a wave of research investigating voluntary contributions mechanisms (VCMs) as a potential alternative in the provision of generic advertising. Using a public goods experiment with heterogeneous income and marginal per capita returns (MPCR), we examine the interaction between high- and low-income individuals in VCMs, an understanding of which can help enhance the performance of voluntary generic advertising programs. While free-riders were present among both income types, the majority of low-income individuals were keen on stimulating higher contributions through cooperation. Conversely, high-income individuals tended to decrease their contributions in the presence of the low-income type.