Ride Your Luck! A Field Experiment on Lottery-Based Incentives for Compliance

Quaderni - Working Paper DSE N° 1089

18 Pages Posted: 8 Dec 2016

See all articles by Marco Fabbri

Marco Fabbri

University of Amsterdam - Faculty of Law

Paolo Barbieri

University of Gothenburg - Centre for Health Economics

Maria Bigoni

University of Bologna - Department of Economics; IZA Institute of Labor Economics

Date Written: November 20, 2016

Abstract

We designed a natural-field experiment in the context of local public transportation to test whether rewards in the form of lottery prizes coupled with traditional sanctions efficiently reduce free-riding. We organized a lottery in a medium-size Italian city the participation in which is linked to purchasing an on-board bus ticket. The lottery was then implemented in half of otherwise identical buses operating in the municipality. Our theoretical model shows that the introduction of the lottery generates an increase in the number of tickets sold and that it is possible to design a self-financing lottery. To estimate the effect of the lottery’s introduction on the amount of tickets sold, we matched and compared treated and control buses operating on the same day on the exact same route. The results show that buses participating in the lottery sold significantly more tickets than the control buses. The increase in revenue from the tickets sold was more than the lottery prize amount.

Keywords: Enforcement, Free-Riding, Public Good, Risk Attitudes, Sanctions

JEL Classification: D04, H42

Suggested Citation

Fabbri, Marco and Barbieri, Paolo and Bigoni, Maria, Ride Your Luck! A Field Experiment on Lottery-Based Incentives for Compliance (November 20, 2016). Quaderni - Working Paper DSE N° 1089. Available at SSRN: https://ssrn.com/abstract=2881465 or http://dx.doi.org/10.2139/ssrn.2881465

Marco Fabbri (Contact Author)

University of Amsterdam - Faculty of Law ( email )

Amsterdam, 1018 WB
Netherlands

HOME PAGE: http://https://sites.google.com/site/alfamarcofabbri/

Paolo Barbieri

University of Gothenburg - Centre for Health Economics ( email )

Vasagatan 1
Goteborg, 40530
Sweden

HOME PAGE: http://economics.handels.gu.se/english/staff/senior_lecturers-lecturers-_researchers/paolo-nicola-ba

Maria Bigoni

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, Bologna 40126
Italy
+390512098134 (Phone)

HOME PAGE: http://https://www.unibo.it/sitoweb/maria.bigoni/en

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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