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