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Local environmental control and institutional crowding-out

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  • Juan-Camilo Cardenas
  • John Stranlund
  • Cleve Willis

Abstract

Regulations that are designed to improve social welfare typically begin with the premise that individuals are purely self-interested. Experimental evidence shows, however, that individuals do not typically behave this way; instead, they tend to strike a balance between self and group interests. From experiments performed in rural Colombia, we found that a regulatory solution for an environmental dilemma that standard theory predicts would improve social welfare clearly did not. This occurred because individuals confronted with the regulation began to exhibit less other-regarding behavior and made choices that were more self-interested; that is, the regulation appeared to crowd out other-regarding behavior.

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Bibliographic Info

Paper provided by The Field Experiments Website in its series Artefactual Field Experiments with number 00028.

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Date of creation: 2000
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Handle: RePEc:feb:artefa:00028

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Web page: http://www.fieldexperiments.com

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  1. Ledyard, John O., . "Public Goods: A Survey of Experimental Research," Working Papers 861, California Institute of Technology, Division of the Humanities and Social Sciences.
  2. James Andreoni & Brian Erard & Jonathan Feinstein, 1998. "Tax Compliance," Journal of Economic Literature, American Economic Association, vol. 36(2), pages 818-860, June.
  3. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-55, September.
  4. Kunreuther, Howard & Easterling, Douglas, 1990. "Are Risk-Benefit Tradeoffs Possible in Siting Hazardous Facilities?," American Economic Review, American Economic Association, vol. 80(2), pages 252-56, May.
  5. Sunstein, Cass R, 1993. "Endogenous Preferences, Environmental Law," The Journal of Legal Studies, University of Chicago Press, vol. 22(2), pages 217-54, June.
  6. Samuel Bowles, 1998. "Endogenous Preferences: The Cultural Consequences of Markets and Other Economic Institutions," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 75-111, March.
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