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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.

Suggested Citation

  • Juan-Camilo Cardenas & John Stranlund & Cleve Willis, 2000. "Local environmental control and institutional crowding-out," Artefactual Field Experiments 00028, The Field Experiments Website.
  • Handle: RePEc:feb:artefa:00028
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