Motivation Crowding in Real Purchasing Decisions: Price vs. Quantity Based Instruments

55 Pages Posted: 5 Mar 2011 Last revised: 21 Sep 2011

Grischa Perino

University of Hamburg

Luca A. Panzone

University College London

Timothy M. Swanson

University College London - Department of Economics and Faculty of Law

Date Written: August 26, 2011

Abstract

We present the first evidence of motivation crowding in real purchasing decisions from a field experiment in a large supermarket chain. We compare three instruments aiming to induce climate friendly choices: labels, subsidies, and product bans and neutrally framed versions of the latter two. Labels and bans activate intrinsic motivation of consumers. A subsidy framed as an intervention is less effective than either a label or an equivalent but neutrally framed price change, i.e. when combined, information and price change perform worse than each individually. We therefore find markedly different effects of price and quantity based instruments on intrinsic motivation.

Keywords: Motivation crowding, Prices vs. Quantities, Climate policy, Diet choices, Field experiment

JEL Classification: C93, Q18, Q54, Q58, H23, H41

Suggested Citation

Perino, Grischa and Panzone, Luca A. and Swanson, Timothy M., Motivation Crowding in Real Purchasing Decisions: Price vs. Quantity Based Instruments (August 26, 2011). Available at SSRN: https://ssrn.com/abstract=1775072 or http://dx.doi.org/10.2139/ssrn.1775072

Grischa Perino (Contact Author)

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

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

Luca A. Panzone

University College London ( email )

Gower Street
London, WC1E 6BT
United Kingdom

Timothy M. Swanson

University College London - Department of Economics and Faculty of Law ( email )

Gower Street
London WC1E 6BT, WC1E 6BT
United Kingdom
+44 (020) 7-679-58 (Phone)
+44 (020) 7-6016-2772 (Fax)

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