From the Price to the Crowding Effect
AbstractCrowding-Theory introduces a new psychological effect into economics. Under identifiable conditions, a higher price or stricter regulation reduces the intrinsic motivation to perform a task. Crowding-Out is the only effect which systematically works in the opposite direction to the Relative Price Effect. Crowding-Out Theory is empirically applied to two issues in Switzerland: (1) The support for siting a nuclear waste repository strongly fell when the population was offered a compensation for hosting it. (2) The possibility of direct participation in politics via referenda tends to raise civic virtue, and (ceteris paribus) tax compliance (Crowding-In Effect).
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Bibliographic InfoArticle provided by Swiss Society of Economics and Statistics (SSES) in its journal Swiss Journal of Economics and Statistics.
Volume (Year): 133 (1997)
Issue (Month): II (June)
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- Guth, Werner, 2000. "Boundedly rational decision emergence - a general perspective and some selective illustrations," Journal of Economic Psychology, Elsevier, vol. 21(4), pages 433-458, August.
- Neunzig, Alexander R., 2002. "Effiziente Fixlöhne, Arbeitsfreude und Crowding-Effekte," CSLE Discussion Paper Series 2002-03, Saarland University, CSLE - Center for the Study of Law and Economics.
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