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To tax or to regulate? Cultural worldviews and the efficacy of policy trials

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  • Montoya-Villalobos, Maria J.
  • Cambo, Alexandre

Abstract

This paper examines the acceptability of taxes and regulatory standards, presented as a full ban, aimed at correcting negative externalities. Using an unframed laboratory experiment, participants engage in a negative externalities game. We analyze the effects of policy trials on acceptability and compare support for bans versus taxes through the lens of cultural worldviews. The results reveal no significant difference in support between the two policies. We find that policy trials increase overall public policy acceptability, but hierarchical worldviews are associated with lower support for public policies, while individualistic orientations have no significant effect. Additionally, we explore how cultural worldviews influence policy preferences and the efficacy of policy trials. The findings suggest that policy preferences are not dependent on worldviews. However, policy trials fail to increase support among individuals with both individualistic and hierarchical orientations, highlighting the challenge of making public policies universally acceptable across different cultural worldviews.

Suggested Citation

  • Montoya-Villalobos, Maria J. & Cambo, Alexandre, 2026. "To tax or to regulate? Cultural worldviews and the efficacy of policy trials," Resource and Energy Economics, Elsevier, vol. 85(C).
    • Handle: RePEc:eee:resene:v:85:y:2026:i:c:s0928765526000011
    DOI: 10.1016/j.reseneeco.2026.101552
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    Keywords

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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

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