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Using loss aversion to incentivize energy efficiency in a principal–agent context — Evidence from a field experiment

Christin Hoffmann and Kirsten Thommes

Economics Letters, 2020, vol. 189, issue C

Abstract: Promoting energy-efficient behavior of agents in a principal–agent context simultaneously decreases costs for firms and mitigates CO2 emissions. Along this line, we analyze the effect of incentive framing on energy-efficient driving behavior. Our results contribute to the understanding of the drawbacks of loss framing. In a situation with persistent labor market relations, an extremely low bonus, and heterogeneous prior performance, the introduction of a bonus framed as a gain outperforms that of a bonus framed as a loss.

Keywords: Energy-efficient behavior; Loss aversion; Field experiment (search for similar items in EconPapers)
JEL-codes: C93 Q49 M52 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.econlet.2020.108984

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