Under-contribution to generic advertising due to self-interested inequity aversion

liaukonyte, jura...[at all];

We modify the behavioural postulate of self-centred inequity aversion to explain producers� reluctance to fund generic fruit and vegetable advertising as a result of experiencing negative utility when others benefit more from a public good than themselves, but positive utility when they earn more than others. We find that higher variability in
returns decreases the probability of a favourable vote. Conversely, if information about payoffs is incomplete, if subjects are allowed to experience a trial run of a generic advertising programme, if returns are equal across producers, or if there is government support for the programme, the likelihood of approval rises.