The private provision of public goods: tests of a provision point mechanism for funding green power programs

Abstract

This paper utilizes laboratory and field experiments to test the use of a provision point mechanism to finance renewable energy 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 single shot, large group laboratory environment, contribution levels are found to be partially demand revealing as well as motivated by other-regarding behavior. In the field, relatively high participation is found. Furthermore, field participation is shown to be responsive to the provision point mechanism as well as program goals.