Ride Your Luck!A Field Experiment on Lotterybased Incentives for Compliance

Marco Fabbri (), Paolo Nicola Barbieri and Maria Bigoni
Additional contact information
Marco Fabbri: Rotterdam Institute of Law and Economics and Institute of Private Law, Erasmus University Rotterdam, Burg
Paolo Nicola Barbieri: Centre for Health Economics, School of Business, Economics and Law, University of Gothenburg, Postal: Box 640, SE 40530 GÖTEBORG

No 678, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: We designed a natural-field experiment in the context of local public transportation to test whether rewards in the form of lottery prizes coupled with traditional sanctions effciently reduce free-riding. We organized a lottery in a medium-size Italian city the participation in which is linked to purchasing an on-board bus ticket. The lottery was then implemented in half of otherwise identical buses operating in the municipality. Our theoretical model shows that the introduction of the lottery generated an increase in the number of tickets sold and that it is possible to design a self-financing lottery. To estimate the effect of the lottery's introduction on the amount of tickets sold, we matched and compared treated and control buses operating on the same day on the exact same route. The results show that buses participating in the lottery sold significantly more tickets than the control buses. The increase in revenue from the tickets sold was more than the lottery prize amount.

Keywords: Enforcement; Free-riding; Public Good; Risk Attitudes; Sanctions (search for similar items in EconPapers)
JEL-codes: D04 H42 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2016-11
New Economics Papers: this item is included in nep-exp
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http://hdl.handle.net/2077/49619 (text/html)

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Working Paper: Ride Your Luck! A Field Experiment on Lottery-based Incentives for Compliance (2016)
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