Revealed preferences for climate protection when the purely individual perspective is relaxed: Evidence from a framed field experiment
AbstractIn this paper, we investigate the real demand for climate protection when the purely individual perspective of existing revealed preference studies is relaxed. This is achieved in two treatments; first, we determine the information subjects receive about the demand revealed by other subjects in a similar decision making situation, second, collective action is implemented whereby all subjects are required to purchase the group's median quantity at a given price. Participants in the experiment were offered the opportunity to contribute to climate protection by purchasing European Union Allowances. Allowances purchased were withdrawn from the European Emissions Trading Scheme. In our experiment, information about other subjects' behaviour has no treatment effect on the demand for climate protection. Under collective action however, the probability of purchasing allowances is higher compared to the reference treatment situation, an individual contribution mechanism. Furthermore, we observe a strong correlation between subjects' demand and their expectations about other participants' behaviour. When collective action is not available, subjects' expectations are consistent with free rider behaviour. --
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Bibliographic InfoPaper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 13-006.
Date of creation: 2013
Date of revision:
experimental economics; demand for climate protection; climate change; willingness to pay;
Find related papers by JEL classification:
- Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-02 (All new papers)
- NEP-DCM-2013-03-02 (Discrete Choice Models)
- NEP-ENV-2013-03-02 (Environmental Economics)
- NEP-EXP-2013-03-02 (Experimental Economics)
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