IDEAS home Printed from https://ideas.repec.org/p/lam/wpaper/15-01.html
   My bibliography  Save this paper

An instrument that could turn crowding-out into crowding-in

Author

Listed:
  • Antoine Beretti
  • Charles Figuières
  • Gilles Grolleau

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 in various contexts hide a more complex reality. We also propose a new policy instrument which taps into agents' heterogeneity regarding intrinsic motivations in order to turn a situation subject to crowding-out into a crowding-in outcome. This instrument uses a self-selection mechanism to match adequate monetary incentives with individuals' types regarding intrinsic motivations.

Suggested Citation

  • Antoine Beretti & Charles Figuières & Gilles Grolleau, 2015. "An instrument that could turn crowding-out into crowding-in," Working Papers 15-01, LAMETA, Universtiy of Montpellier, revised Jan 2015.
    • Handle: RePEc:lam:wpaper:15-01
    as

    Download full text from publisher

    File URL: http://www.lameta.univ-montp1.fr/Documents/DR2015-01.pdf
    File Function: Revised version, 2015
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Daniel Kahneman & Peter P. Wakker & Rakesh Sarin, 1997. "Back to Bentham? Explorations of Experienced Utility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(2), pages 375-406.
    2. B. Douglas Bernheim, 2009. "Behavioral Welfare Economics," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 267-319, 04-05.
    3. Suzumura, Kotaro & Xu, Yongsheng, 2001. "Characterizations of Consequentialism and Nonconsequentialism," Journal of Economic Theory, Elsevier, vol. 101(2), pages 423-436, December.
    4. Bruno S. Frey & Alois Stutzer, 2005. "Beyond outcomes: measuring procedural utility," Oxford Economic Papers, Oxford University Press, vol. 57(1), pages 90-111, January.
    5. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-755, September.
    6. Uri Gneezy & Stephan Meier & Pedro Rey-Biel, 2011. "When and Why Incentives (Don't) Work to Modify Behavior," Journal of Economic Perspectives, American Economic Association, vol. 25(4), pages 191-210, Fall.
    7. Antoine Beretti & Charles Figuières & Gilles Grolleau, 2013. "Using Money to Motivate Both ‘Saints’ and ‘Sinners’: a Field Experiment on Motivational Crowding-Out," Kyklos, Wiley Blackwell, vol. 66(1), pages 63-77, February.
    8. Bruno Frey & Matthias Benz & Alois Stutzer, 2004. "Introducing Procedural Utility: Not Only What, but Also How Matters," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(3), pages 377-401, September.
    9. Carl Mellström & Magnus Johannesson, 2008. "Crowding Out in Blood Donation: Was Titmuss Right?," Journal of the European Economic Association, MIT Press, vol. 6(4), pages 845-863, June.
    10. B. Douglas Bernheim & Antonio Rangel, 2009. "Beyond Revealed Preference: Choice-Theoretic Foundations for Behavioral Welfare Economics," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 51-104.
    11. Suzumura, Kotaro & Xu, Yongsheng, 2003. "Consequences, opportunities, and generalized consequentialism and non-consequentialism," Journal of Economic Theory, Elsevier, vol. 111(2), pages 293-304, August.
    12. Yuval Salant & Ariel Rubinstein, 2008. "(A, f): Choice with Frames -super-1," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 75(4), pages 1287-1296.
    13. Reeson, Andrew F. & Tisdell, John G., 2008. "Institutions, motivations and public goods: An experimental test of motivational crowding," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 273-281, October.
    14. Holmås, Tor Helge & Kjerstad, Egil & Lurås, Hilde & Straume, Odd Rune, 2010. "Does monetary punishment crowd out pro-social motivation? A natural experiment on hospital length of stay," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 261-267, August.
    15. Marc Fleurbaey & Erik Schokkaert, 2013. "Behavioral Welfare Economics and Redistribution," American Economic Journal: Microeconomics, American Economic Association, vol. 5(3), pages 180-205, August.
    16. B. Douglas Bernheim & Antonio Rangel, 2007. "Toward Choice-Theoretic Foundations for Behavioral Welfare Economics," American Economic Review, American Economic Association, vol. 97(2), pages 464-470, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stéphane Mussard & Fattouma Souissi-Benrejab, 2019. "Gini-PLS Regressions," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(3), pages 477-512, September.
    2. Jacqmin, Julien & Lefebvre, Mathieu, 2016. "Does sector-specific experience matter? The case of European higher education ministers," Research Policy, Elsevier, vol. 45(5), pages 987-998.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antoine Beretti & Charles Figuières & Gilles Grolleau, 2019. "How to turn crowding-out into crowding-in? An innovative instrument and some law-related examples," European Journal of Law and Economics, Springer, vol. 48(3), pages 417-438, December.
    2. Malte F. Dold, 2018. "Back to Buchanan? Explorations of welfare and subjectivism in behavioral economics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 25(2), pages 160-178, April.
    3. Ben McQuillin & Robert Sugden, 2012. "Reconciling normative and behavioural economics: the problems to be solved," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 38(4), pages 553-567, April.
    4. Chambers, Christopher P. & Hayashi, Takashi, 2012. "Choice and individual welfare," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1818-1849.
    5. Antoine Beretti & Charles Figuières & Gilles Grolleau, 2013. "Using Money to Motivate Both ‘Saints’ and ‘Sinners’: a Field Experiment on Motivational Crowding-Out," Kyklos, Wiley Blackwell, vol. 66(1), pages 63-77, February.
    6. Sophie Bade & Erel Segal-Halevi, 2018. "Fairness for Multi-Self Agents," Papers 1811.06684, arXiv.org, revised Apr 2022.
    7. B. Douglas Bernheim, 2009. "Behavioral Welfare Economics," Journal of the European Economic Association, MIT Press, vol. 7(2-3), pages 267-319, 04-05.
    8. Mandler, Michael, 2014. "Indecisiveness in behavioral welfare economics," Journal of Economic Behavior & Organization, Elsevier, vol. 97(C), pages 219-235.
    9. Ghosal, Sayantan & Dalton, Patricio, 2013. "Characterizing Behavioral Decisions with Choice Data," CAGE Online Working Paper Series 107, Competitive Advantage in the Global Economy (CAGE).
    10. Schnellenbach, Jan & Schubert, Christian, 2015. "Behavioral political economy: A survey," European Journal of Political Economy, Elsevier, vol. 40(PB), pages 395-417.
    11. Joachim Fuenfgelt & Stefan Baumgaertner, 2012. "Regulation of morally responsible agents with motivation crowding," Working Paper Series in Economics 241, University of Lüneburg, Institute of Economics.
    12. Yuta Inoue, 2020. "Growing Consideration," Working Papers 2003, Waseda University, Faculty of Political Science and Economics.
    13. Francesco Cerigioni & Simone Galperti, 2021. "Listing specs: The effect of framing attributes on choice," Economics Working Papers 1775, Department of Economics and Business, Universitat Pompeu Fabra.
    14. Gerardo Infante & Guilhem Lecouteux & Robert Sugden, 2016. "Preference purification and the inner rational agent: a critique of the conventional wisdom of behavioural welfare economics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 23(1), pages 1-25, March.
    15. Olof Johansson-Stenman & James Konow, 2010. "Fair Air: Distributive Justice and Environmental Economics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(2), pages 147-166, June.
    16. DECANCQ, Koen & FLEURBAEY, Marc & SCHOKKAERT, Erik, 2014. "Inequality, income, and well-being," LIDAM Discussion Papers CORE 2014018, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    17. Alpaslan Akay & Olivier Bargain & H. Xavier Jara, 2020. "‘Fair’ welfare comparisons with heterogeneous tastes: subjective versus revealed preferences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 55(1), pages 51-84, June.
    18. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012. "Revealed Attention," American Economic Review, American Economic Association, vol. 102(5), pages 2183-2205, August.
    19. Daniel Serra, 2019. "Neuroeconomics and modern neuroscience," CEE-M Working Papers halshs-02160907, CEE-M, Universtiy of Montpellier, CNRS, INRA, Montpellier SupAgro.
    20. Eddie Dekel & Barton L. Lipman, 2010. "How (Not) to Do Decision Theory," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 257-282, September.

    More about this item

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lam:wpaper:15-01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Patricia Modat (email available below). General contact details of provider: https://edirc.repec.org/data/lamplfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.