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Moral Suasion and Economic Incentives: Field Experimental Evidence from Energy Demand

Koichiro Ito (), Takanori Ida and Makoto Tanaka ()

American Economic Journal: Economic Policy, 2018, vol. 10, issue 1, 240-67

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.

JEL-codes: C93 D83 L94 L98 Q41 Q48 (search for similar items in EconPapers)
Date: 2018
Note: DOI: 10.1257/pol.20160093
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Handle: RePEc:aea:aejpol:v:10:y:2018:i:1:p:240-67