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Rebate versus Matching, Again: How Opt-in Reshapes the Effectiveness of Price-Equivalent Subsidies

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  • Shusaku Sasaki
  • Takunori Ishihara
  • Hiroki Kato

Abstract

Traditional theory predicts equivalent effects of matching and rebate subsidies at equal prices, yet experiments favor matching. Refinements narrow this gap but retain compulsory assignment; take-up is voluntary in practice. We test this implementation margin in a nationwide, incentivized donation experiment with 2,400 Japanese adults, crossing subsidy type and assignment rule. After equalizing budget constraints and accounting for comprehension, total giving is indistinguishable under compulsory assignment. Under opt-in, the matching advantage re-emerges and nearly quadruples because rebate loses effectiveness. LATE estimates suggest advantageous selection into matching but disadvantageous selection into rebate. Self-selection can reshape the policy ranking of price-equivalent instruments.

Suggested Citation

  • Shusaku Sasaki & Takunori Ishihara & Hiroki Kato, 2026. "Rebate versus Matching, Again: How Opt-in Reshapes the Effectiveness of Price-Equivalent Subsidies," Papers 2607.03113, arXiv.org.
    • Handle: RePEc:arx:papers:2607.03113
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    File URL: https://arxiv.org/pdf/2607.03113
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