A new rationale for not picking low hanging fruits: The separation of ownership and control

Denis Claude () and Mabel Tidball ()
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Mabel Tidball: 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

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Abstract: Recent attempts at explaining the energy-efficiency gap rely on considerations related to organizational and behavioral/cognitive failures. In this paper, we build on the strategic delegation literature to advance a complementary explanation. It is shown that strategic market interaction may encourage business owners to instill a bias against energy efficiency in managerial compensation contracts. Since managers respond to financial incentives, their decisions will reflect this bias, resulting in lack of investment.

Keywords: energy efficiency; strategic delegation; behavioral bias; energy paradox (search for similar items in EconPapers)
Date: 2019-06-01
New Economics Papers: this item is included in nep-ene and nep-reg
Note: View the original document on HAL open archive server: https://hal.umontpellier.fr/hal-02316599v1
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Working Paper: A new rationale for not picking low hanging fruits: The separation of ownership and control (2019)
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