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

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