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The Role of Non-Binding Pledges in Social Dilemmas with Mitigation and Adaptation

David McEvoy (), Tobias Haller () and Esther Blanco ()

Working Papers from Faculty of Economics and Statistics, University of Innsbruck

Abstract: This study presents experimental results on the role that non-binding pledges have on the ability of resource users to manage the threat of probabilistic group damages in two separate environments. First, an environment where agents can work collectively to try to mitigate the root cause of the damage (mitigation), which is a form of public good. Second, an environment where in addition to collective mitigation, agents can work autonomously to protect themselves from the damages if they occur (adaptation). The tension is that mitigation and adaptation investments are strategic substitutes. We begin with a model that points to how non-binding pledges could be more effective in a world with both mitigation and adaptation strategies, compared to mitigation only. First-period results show that (i) consistent with previous literature, pledges in a mitigation-only environment do not increase average investments in collective mitigation, but (ii) when both mitigation and adaptation opportunities exist, pledges lead to higher investment in collective mitigation, lower investment in adaptation and increased efficiency. Although the average treatment effect disappears over time as the amount pledged decreases, pledges remain significant predictors of mitigation investments over the course of the experiment.

Keywords: social dilemmas; economic experiments; behavioral economics; public goods; mitigation; adaptation; environmental damages (search for similar items in EconPapers)
JEL-codes: C92 D9 H4 Q54 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2019-04
New Economics Papers: this item is included in nep-cdm, nep-env and nep-exp
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