Nudging farmers to comply with water protection rules Experimental evidence from Germany

Nitrogen runoffs induced by agricultural fertilisation cause serious environmental damage to surface waters. Environmental and consumer protectionists demand government intervention to mitigate these externalities. With this in mind, the present study examines the effects of nudge-based regulatory strategies. We use an incentivised single-player multi-period business management game as an experimental device to study how nudges affect compliance with the minimum-distance-to-water rule in a sample of German farmers. We investigate two different nudge treatments: a nudge with information and pictures showing environmental and health damages that are presumably caused by breaching the minimum-distance-to-water rule, and a nudge with an additional social comparison suggesting that the majority of farmers in the same region comply with the rule. We observe three core experimental outcomes: first, nudging has a preventive effect and reduces the share of non-compliant participants. Second, against all expectations, the preventive effect of the nudge with an additional social comparison is weaker than that of the nudge with information and pictures alone. Third, despite the overall positive effects of nudging, the nudge with social comparison even increased the severity of non-complying behaviour in the deviant subpopulation. Acknowledgement : The authors gratefully acknowledge ?nancial support from the German Research Foundation (DFG). We thank Dr. Matthias Buchholz, Dr. Daniel Hermann and the Centre for Statistics of the University of G ttingen for helpful comments and statistical advice. We also thank Manfred Tietze for support by programming of the experiment.