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How to turn crowding-out into crowding-in? An innovative instrument and some law-related examples

Author

Listed:
  • Antoine Beretti

    (Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

  • Charles Figuieres

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Gilles Grolleau

    (BSB - Burgundy School of Business (BSB) - Ecole Supérieure de Commerce de Dijon Bourgogne (ESC), CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)

Abstract

Using a simple decision-theoretic approach, we formalize how agents with different kinds of intrinsic motivations react to the introduction of monetary incentives. We contend that empirical results supporting the existence of a crowding-out effect under various legal procedures hide a more complex reality, where some individuals contribute thanks to these additional monetary incentives while others reduce their contributions. Our approach allows us to study the theoretical ability of the self selection mechanism (Mellström and Johannesson in J Eur Econ Assoc 6:845–863, 2008; Beretti et al. in Kyklos 66(1):63–77, 2013) to reduce the likelihood to backfire against the cause it is meant to promote. This mechanism consists of a monetary payment for the pro-social behavior and it offers agents the choice to either keep the money for themselves or to direct it to a charity. We show that this legal procedure dominates others more classical procedures because it taps wisely into the motivational heterogeneity of individuals. It uses a self-selection mechanism to match adequate monetary incentives with individuals' types regarding intrinsic motivations. It may even turn a situation subject to crowding-out into a crowding-in outcome.

Suggested Citation

  • Antoine Beretti & Charles Figuieres & Gilles Grolleau, 2019. "How to turn crowding-out into crowding-in? An innovative instrument and some law-related examples," Post-Print hal-02289365, HAL.
    • Handle: RePEc:hal:journl:hal-02289365
    DOI: 10.1007/s10657-019-09630-9
    Note: View the original document on HAL open archive server: https://hal.science/hal-02289365v1
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    Cited by:

    1. Gilles Grolleau & Murat Mungan & Naoufel Mzoughi, 2022. "Letting Offenders Choose Their Own Punishment ?," Post-Print hal-03694337, HAL.
    2. Gilles Grolleau & Murat C. Mungan & Naoufel Mzoughi, 2022. "Letting offenders choose their punishment?," Kyklos, Wiley Blackwell, vol. 75(4), pages 607-617, November.
    3. Claron, Charles & Mikou, Mehdi & Levrel, Harold & Tardieu, Léa, 2022. "Mapping urban ecosystem services to design cost-effective purchase of development rights programs: The case of the Greater Paris metropolis," Land Use Policy, Elsevier, vol. 122(C).
    4. Talia Goren & Itai Beeri & Dana R. Vashdi, 2023. "Framing policies to mobilize citizens' behavior during a crisis: Examining the effects of positive and negative vaccination incentivizing policies," Regulation & Governance, John Wiley & Sons, vol. 17(2), pages 570-591, April.

    More about this item

    Keywords

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    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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