Charles Figuieres

Using Money to Motivate Both ‘Saints’ and ‘Sinners’: a Field Experiment on Motivational Crowding-Out

Economists recognize that monetary incentives can backfire through the crowding-out of moral and social motivations leading to an overall decrease of the desired behavior. We implement a field experiment where participants are asked to fill a questionnaire on pro-environmental behaviors under different incentive schemes, either with no monetary incentive (control) or with low or high monetary incentive directed either to the respondents or to an environmental cause. We investigate whether (i) there is a significant crowding-out effect, (ii) directing monetary incentive to the cause rather than to the respondents reduces the overall impact of a crowding-out effect, and (iii) offering the choice regarding the money recipient a ects participation. Except for a high monetary incentive where the respondent chooses himself the end-recipient, we show that monetary rewards directed either at the individual or at the cause actually harms intrinsic motivations, but not to the same extent. We formalize our results building on an adaptation of an original model by Bolle and Otto (2010) and introduce agents heterogeneity in terms of intrinsic motivation. This heterogeneity has key implications for the understanding of the crowding-out e ect. Several policy recommendations regarding the use of market-based instruments are drawn.

Conservation Priorities when Species Interact: The Noah's Ark Metaphor Revisited

This note incorporates ecological interactions into the Noahs Ark problem. In doing so, we arrive at a general model for ranking in situ conservation projects accounting for species interrelations and provide an operational cost-effectiveness method for the selection of best preserving diversity projects under a limited budget constraint.

Public infrastructure, non-cooperative investments, and endogenous growth

Two countries strategically invest in productive infrastructure within a general equilibrium model with endogenous growth. These public investments generate externalities. Dynamic analysis reveals that: (1) under constant returns, the two countries growth rates differ during the transition but are identical on the balanced growth path, (2) a country with decreasing returns can experience sustained growth provided that the other country grows at a positive constant rate, (3) cooperation does not necessarily lead to higher growth for each country, and it can increase or decrease the gap between countries growth rates depending on the countries consumption preferences regarding domestic and foreign goods.

Choice overload, coordination and inequality: three hurdles to the effectiveness of the compensation mechanism?

We test the effectiveness of a compensation mechanism, adapted from Varian (Am Econ Rev 84(5):1278–1293, 1994). When a negative externality is produced the mechanism allows agents suffering from it to compensate those who reduce its production, by way of transfers implemented via a two-stage design. We investigate various factors that might affect the likelihood that subjects coordinate on a Pareto optimum: the size of the strategy space, the number of subgame perfect equilibria and inequality of the payoff distribution. Our experimental findings suggest that the mechanism’s effectiveness crucially depends on the final payoff distribution (after transfers). It is also strongly negatively affected by the size of the strategy space. Finally, the impact of the number of equilibria on coordination only has a weak negative effect.

The trade-off between welfare and equality in a public good experiment

We report the results of an experiment on voluntary contributions to a public good in which we implement a redistribution of the group endowment among group members in a lump sum manner. We study the impact of redistribution on group contribution, on individuals’ contributions according to their endowment and on welfare. Our experimental results show that welfare increases when equality is broken, as predicted by theory (Itaya et al. in, Econ Lett 57:289–296, 1997), because the larger contribution of the rich subjects overcompensates the lower contribution of the poor subjects. However, our data suggest that the adjustment of individual contributions after redistribution is not always compatible with the predictions. In particular, subjects who become poor contribute much less than subjects who were poor since the beginning.

Public Infrastructure, Non‐Cooperative Investments, and Endogenous Growth

Two countries strategically invest in productive infrastructure within a general equilibrium model with endogenous growth. These public investments generate externalities. Dynamic analysis reveals that: (1) under constant returns, the two countries growth rates differ during the transition but are identical on the balanced growth path, (2) a country with decreasing returns can experience sustained growth provided that the other country grows at a positive constant rate, (3) cooperation does not necessarily lead to higher growth for each country, and it can increase or decrease the gap between countries growth rates depending on the countries consumption preferences regarding domestic and foreign goods.

Public infrastructure, non-cooperative investments, and endogenous growth: Public infrastructure, non-cooperative investments

Two countries strategically invest in productive infrastructure within a general equilibrium model with endogenous growth. These public investments generate externalities. Dynamic analysis reveals that: (1) under constant returns, the two countries growth rates differ during the transition but are identical on the balanced growth path, (2) a country with decreasing returns can experience sustained growth provided that the other country grows at a positive constant rate, (3) cooperation does not necessarily lead to higher growth for each country, and it can increase or decrease the gap between countries growth rates depending on the countries consumption preferences regarding domestic and foreign goods.