Revealed preferences for climate protection when the purely individual perspective is relaxed: Evidence from a framed field experiment

Andreas Löschel, Bodo Sturm and Reinhard Uehleke

No 13-006, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: In this paper, we investigate the real demand for climate protection when the purely individual perspective of existing revealed preference studies is relaxed. This is achieved in two treatments; first, we determine the information subjects receive about the demand revealed by other subjects in a similar decision making situation, second, collective action is implemented whereby all subjects are required to purchase the group's median quantity at a given price. Participants in the experiment were offered the opportunity to contribute to climate protection by purchasing European Union Allowances. Allowances purchased were withdrawn from the European Emissions Trading Scheme. In our experiment, information about other subjects' behaviour has no treatment effect on the demand for climate protection. Under collective action however, the probability of purchasing allowances is higher compared to the reference treatment situation, an individual contribution mechanism. Furthermore, we observe a strong correlation between subjects' demand and their expectations about other participants' behaviour. When collective action is not available, subjects' expectations are consistent with free rider behaviour.

Keywords: experimental economics; demand for climate protection; climate change; willingness to pay (search for similar items in EconPapers)
JEL-codes: C93 Q51 Q54 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-dcm, nep-env and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:13006

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