Instrument Choice and Motivation: Evidence from a Climate Change Experiment

Timo Goeschl (University of Heidelberg)

December 7, 2009, 11:00–12:30


Room MH 205

Environment Economics Seminar


Are prices or quantities the best regulatory instrument to align private actions with public interests in the presence of externalities? We add another dimension to this ongoing debate by experimentally analyzing the interaction between instrument choice and intrinsic motivation of regulated agents. The response of subjects facing a trade-off between real CO2 emissions and private monetary payoffs to both a price and a quantity instrument are tested. We find evidence that taxes crowd out intrinsic motivation while emission standards are neutral. Crowding is short term persistent and not well explained by established cognitive theories of motivational crowding.

JEL codes

  • C91: Laboratory, Individual Behavior
  • H23: Externalities • Redistributive Effects • Environmental Taxes and Subsidies
  • H41: Public Goods
  • Q54: Climate • Natural Disasters • Global Warming


Timo Goeschl (University of Heidelberg), Instrument Choice and Motivation: Evidence from a Climate Change Experiment, Environment Economics Seminar, Toulouse: TSE, December 7, 2009, 11:00–12:30, room MH 205.