American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
Moral Suasion and Economic Incentives: Field Experimental Evidence from Energy Demand
American Economic Journal: Economic Policy
vol. 10,
no. 1, February 2018
(pp. 240–67)
(Complimentary)
Abstract
Firms and governments often use moral suasion and economic incentives to influence intrinsic and extrinsic motivations for economic activities. To investigate persistence of such interventions, we randomly assign households to moral suasion and dynamic pricing that stimulate energy conservation during peak-demand hours. We find significant habituation and dishabituation for moral suasion—the treatment effect diminishes after repeated interventions but can be restored to the original level by a sufficient time interval between interventions. Economic incentives induce larger treatment effects, little habituation, and significant habit formation. Our results suggest moral suasion and economic incentives produce substantially different short-run and long-run policy impacts.Citation
Ito, Koichiro, Takanori Ida, and Makoto Tanaka. 2018. "Moral Suasion and Economic Incentives: Field Experimental Evidence from Energy Demand." American Economic Journal: Economic Policy, 10 (1): 240–67. DOI: 10.1257/pol.20160093Additional Materials
JEL Classification
- C93 Field Experiments
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- L94 Electric Utilities
- L98 Industry Studies: Utilities and Transportation: Government Policy
- Q41 Energy: Demand and Supply; Prices
- Q48 Energy: Government Policy
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