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Do Extrinsic Incentives Undermine Social Norms? Evidence from a Field Experiment in Energy Conservation

Author

Listed:
  • José A. Pellerano

    () (Universidad Iberoamericana)

  • Michael K. Price

    () (Georgia State University
    NBER)

  • Steven L. Puller

    () (NBER
    Texas A&M University
    The E2e Project)

  • Gonzalo E. Sánchez

    () (ESPOL)

Abstract

Abstract Policymakers use both extrinsic and intrinsic incentives to induce consumers to change behavior. This paper investigates whether the use of extrinsic financial incentives is complementary to intrinsic incentives, or whether financial incentives undermine the effect of intrinsic incentives. We conduct a randomized controlled trial that uses information interventions to residential electricity customers to test this question. We find that adding economic incentives to normative messages not only does not strengthen the effect of the latter but may reduce it. These results are consistent with recent theoretical work that suggests a tension between intrinsic motivation and extrinsic incentives.

Suggested Citation

  • José A. Pellerano & Michael K. Price & Steven L. Puller & Gonzalo E. Sánchez, 2017. "Do Extrinsic Incentives Undermine Social Norms? Evidence from a Field Experiment in Energy Conservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 413-428, July.
  • Handle: RePEc:kap:enreec:v:67:y:2017:i:3:d:10.1007_s10640-016-0094-3
    DOI: 10.1007/s10640-016-0094-3
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    References listed on IDEAS

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    Cited by:

    1. Jaime Torres, Mónica M. & Carlsson, Fredrik, 2018. "Direct and spillover effects of a social information campaign on residential water-savings," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 222-243.
    2. Weber, Sylvain & Puddu, Stefano & Pacheco, Diana, 2017. "Move it! How an electric contest motivates households to shift their load profile," Energy Economics, Elsevier, vol. 68(C), pages 255-270.
    3. Johan Graafland & Reyer Gerlagh, 2019. "Economic Freedom, Internal Motivation, and Corporate Environmental Responsibility of SMEs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1101-1123, November.
    4. Bernadeta Gołębiowska & Anna Bartczak & Wiktor Budziński, 2019. "Impact of social comparison on DSM in Poland," Working Papers 2019-10, Faculty of Economic Sciences, University of Warsaw.

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