Instrument Choice and Motivation: Evidence from a Climate Change Experiment

CBESS Discussion Paper 09-05

37 Pages Posted: 15 Aug 2010

See all articles by Timo Goeschl

Timo Goeschl

University of Heidelberg - Alfred Weber Institute for Economics

Grischa Perino

University of Hamburg

Date Written: June 9, 2009

Abstract

Are prices or quantities the best regulatory instrument to align private actions with public interests in the presence of externalities? We add another dimension to this ongoing debate by experimentally analyzing the interaction between instrument choice and intrinsic motivation of regulated agents. The response of subjects facing a trade-o_ between real CO2 emissions and private monetary payoffs to both a price and a quantity instrument are tested. We find evidence that taxes crowd out intrinsic motivation while emission standards are neutral. Crowding is short term persistent and not well explained by established cognitive theories of motivational crowding.

Keywords: Instrument Choice, Motivation Crowding, Externalities

JEL Classification: H23, H41, Q58, C91

Suggested Citation

Goeschl, Timo and Perino, Grischa, Instrument Choice and Motivation: Evidence from a Climate Change Experiment (June 9, 2009). CBESS Discussion Paper 09-05, Available at SSRN: https://ssrn.com/abstract=1658360 or http://dx.doi.org/10.2139/ssrn.1658360

Timo Goeschl

University of Heidelberg - Alfred Weber Institute for Economics ( email )

Bergheimer Str. 20
D-69115 Heidelberg
Germany

Grischa Perino (Contact Author)

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

HOME PAGE: http://sites.google.com/site/gperinosite/

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