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Are individuals of higher socio-economic status less ethical than those of lower status? Highly popularised research findings claim that this is the case. This paper provides evidence against this claim, based on data from two large survey experiments with more than 11,000 participants. We prime social status in two heterogeneous samples of the German population and then elicit ethical behaviour in an incentivised experimental task. Thus, our data allows us to study both correlation (using demographic data) and causality (using the priming). Our study rejects the claim that higher social status individuals are less ethical on both accounts.

The objective of this research is to investigate the potential for behaviourally informed policy interventions to encourage sustainable food choices on online takeaway delivery platforms. Specifically, we plan to compare the relative efficacy of a price intervention, an information provision and a behavioural intervention within the same experimental setting and seek to provide novel insights into potential welfare and distributional effects. The research will be conducted via Predictiv, the Behavioural Insight Team’s (BIT) policy testing lab, using the ‘Take a BITe’ food delivery platform simulation.

Experimental and Survey Evidence from Major StakeholderGroups

Behavioural nudges are now well established in public policy and are being increasingly used as environmental policy instruments [1]. However, they often fail to achieve persistent behaviour change [2]. Consequently, it has been suggested hat highlighting the intrinsic motivational basis of pro-environmental behaviour (PEB) may be a more effective strategy to promote and sustain behavioural change [3,4]. However, it remains unknown how to best leverage intrinsic motivation towards the environment [5]. In this research project, we propose that ‘warm glow’ can be used to leverage intrinsic motivation toward pro-environmental behaviours. According to Andreoni [6], the theory of ‘warm glow’ suggests that people act pro-socially because of the positive emotional reward obtained from doing so. In the environmental domain, warm glow has recently be identified as an important, yet under explored, intrinsic motive in environmental related decisions [7]. Recent field evidence suggests that directly appealing to warm glow motives has the potential to foster cooperation and increase pro-social behaviour in a variety of contexts [8,9]. However, it has not yet been explored whether warm glow experiences can be exogenously manipulated in a controlled experimental setting and whether they can create a positive feedback loop with PEB. In this study, we will use a large online experiment to study the effect of intrinsically (warm glow, cold prickle) and extrinsically (social norm) motivated treatment messages on pro-environmental behaviour, relative to a control group. The control message contains basic information about climate change. The warm glow message increases the salience of positive feelings from helping the environment and the cold-prickle message highlights the negative emotions associated with inaction. The social norm message presents an injunctive/prescriptive social norm. The exact research questions and hypotheses are outlined below. Moreover, we will explore the role of emotions as an underlying mechanism for the efficacy of information nudges in encouraging intrinsic motivation toward the environment. In contrast to previous research in lab settings that relies primarily on donation decisions to measure pro-environmental behaviour (e.g., dictator game with an environmental charity as the recipient), our study introduces a novel experimental measure of pro-environmental behaviour. We developed a pro-environmental behaviour task (adapted from the standard Stroop Task) in which participants can generate a donation for an environmental charity based on voluntary time investment and exerted effort. [1] F. Carlsson, C.A. Gravert, V. Kurz, O. Johansson-Stenman, Nudging as an Environmental Policy Instrument, Forthcom. Rev. Environ. Econ. Policy Abstr. (2020) 1–32. [2] E. Frey, T. Rogers, Persistence: How Treatment Effects Persist After Interventions Stop, Policy Insights from Behav. Brain Sci. 1 (2014) 172–179. [3] J.W. Bolderdijk, L. Steg, E.S. Geller, P.K. Lehman, T. Postmes, Comparing the effectiveness of monetary versus moral motives in environmental campaigning, Nat. Clim. Chang. 3 (2012) 413–416. [4] S. van der Linden, Warm glow is associated with low- but not high-cost sustainable behaviour, Nat. Sustain. 1 (2018) 28–30. [5] O. Kácha, K. Ruggeri, Nudging intrinsic motivation in environmental risk and social policy, J. Risk Res. 9877 (2018) 1–12. [6] J. Andreoni, Giving with Impure Altruism : Applications to Charity and Ricardian Equivalence, J. Polit. Econ. 97 (1989). [7] S. van der Linden, Intrinsic motivation and pro-environmental behaviour, Nat. Clim. Chang. 5 (2015) 612–613. [8] J.A. List, J.J. Murphy, M.K. Price, A.G. James, An experimental test of fundraising appeals targeting donor and recipient benefits, Nat. Hum. Behav. (2021). [9] M. Bergquist, L. Nyström, A. Nilsson, Feeling or following? A field-experiment comparing social norms-based and emotions-based motives encouraging pro-environmental donations, J. Consum. Behav. 19 (2020) 351–358.

We conduct a representative survey experiment in Germany to understand why people support inefficient policies. In particular, we measure beliefs about and preferences for rent control – a policy that is widely regarded as harmful by experts. To tease out causal mechanisms, we provide randomly selected subsets of participants with empirical estimates about the effects of rent control on rent prices and housing supply and with information about the consensus among economists against rent control. We find that people update their beliefs and that this leads to lower demand for rent control. Left-wingers update their beliefs more strongly, which reduces the ideological gap in support for rent control by about one-third. Providing information about economists’ rejection of this policy leads to the largest reduction in support. However, the main drivers of support for rent control are fairness considerations and profit motives. Our study also highlights the importance of trust in expert advice since treatment effects are consistently larger among those who indicate trust in expert advice. Finally, an obfuscated follow-up survey conducted three weeks later reveals that the effects, both on support for rent control and on beliefs, persist only for those who trust.

We appreciate the response by Erik Haites (2020) to our paper (van den Bergh et al., 2020a), not only because it is well-informed and contains many subtle remarks, but also because our article was aimed at stimulating debate on how to achieve effective climate policies that limit global warming change to 1.5-2°C. There is no question that the latter represents a tremendous challenge for the global community, and our dual-track proposal is intended to provide a workable approach to it by addressing the free-riding problem through policy harmonization. Although we feel that Haites raises many relevant points regarding the difficulties of carrying out the proposal, most of these were, in fact, already addressed by our paper (...)

La eficacia, la equidad y la eficiencia de las políticas ambientales orientadas a la sostenibilidad dependen en gran medida del modelo subyacente de comportamiento individual. Sólo un modelo fundado empíricamente en la acción y motivación individuales puede garantizar el diseño de políticas y acuerdos ambientales efectivos. La teoría dominante en política medioambiental se basa en el modelo económico estándar racional (neoclásico), de comportamiento egoísta y preferencias estables. Esto tiende a favorecer a los instrumentos políticos que tratan de influir en el comportamiento a través de señales de precios. Más recientemente, la economía conductual ha generado evidencia experimental considerable de que el comportamiento individual se desvía de la plena racionalidad y el puro interés propio. Esta Tesis tiene en cuenta la racionalidad limitada y las interacciones sociales para identificar instrumentos de política ambiental adecuados. Contiene cinco ensayos que investigan las aplicaciones de modelos alternativos de comportamiento para mejorar o modificar ideas dentro de la economía ambiental y la teoría de la política pública. La Tesis combina modelos teóricoanalíticos e investigación económica experimental para estudiar las preferencias individuales y fundamentar el diseño de políticas. El primer ensayo ofrece una extensa revisión crítica de la economía conductual y su aplicación al comportamiento de relevancia medioambiental, y concluye que asumir la existencia de anomalías sistemáticas en las decisiones y preferencias sociales proporciona un punto de partida para una política ambiental eficaz. El segundo ensayo presenta un análisis teórico-formal del papel de la publicidad en el consumo impulsado por cuestiones de estatus y normas sociales, con graves impactos ambientales. Esto se refleja mediante la formulación de un modelo económico-comportamental con una función de utilidad que formaliza la idea de Veblen del consumo conspicuo. Por lo tanto, el modelo combina externalidades ambientales y de consumo, y muestra qué paquete particular de políticas es necesario para restaurar el bienestar social óptimo. El tercer ensayo investiga motivos no pecuniarios importantes para el comportamiento sostenible que los modelos estándar desatienden. Se llevaron a cabo experimentos de campo, cuyos resultados evidencian la relevancia de los motivos sociales en el comportamiento sostenible. El cuarto ensayo explora el impacto de la racionalidad limitada y de las preferencias sociales en las percepciones de los grupos de interés (stakeholders) acerca de las pérdidas y ganancias y de las dinámicas de negociación que se dan en las negociaciones internacionales sobre cambio climático. Ideas principales de la economía conductual son sistemáticamente aplicadas para explicar y predecir cómo los distintos tipos de actores (ciudadanos, expertos, negociadores, políticos, grupos de interés) actuarán en las negociaciones climáticas. El quinto ensayo utiliza un experimento de laboratorio para evaluar las preferencias o contribuciones en la reducción de emisiones bajo diferentes escenarios ─ gradual y abrupto ─ de desastres naturales debidos al cambio climático. En conclusión, la presente Tesis muestra que la economía conductual y experimental proporcionan una base muy sólida para el estudio de comportamientos individuales ambientalmente relevantes y la toma de decisiones públicas, con el objetivo de diseñar una política y acuerdos ambientales más efectivos., The effectiveness, equity and efficiency of environmental policies depend very much on the underlying model of individual behavior. Only an empirically founded model of individual action and motivation can guarantee the design of adequate environmental policies and environmental agreements. The dominant theory of environmental policy is based on the standard (neoclassical) economic model of rational, self-interested behavior and stable preferences. This tends to favor policy instruments that attempt to influence behavior through price signals. More recently, behavioral economics has generated considerable experimental evidence that individual behavior deviates from full rationality and pure self-interest. This thesis attempts to take into account bounded rationality and social interactions to identify suitable environmental policy instruments. It contains five essays that investigate applications of alternative models of behavior to refine or alter insights within environmental economics and public policy theory. The thesis combines theoretical-analytical modeling and experimental economic research to study individual preferences and inform policy design. The first essay offers an extensive and critical review of behavioral economics and its application to environmentally relevant behavior and concludes that assuming systematic decision anomalies and social preferences provides an improved starting point for effective environmental policy. The second essay presents a formal-theoretical analysis of the role of advertising in status- and norm-driven consumption with serious environmental impacts. This is captured by formulating a behavioral-economic model with a utility function that formalizes Veblen’s idea of conspicuous consumption. The model combines therefore environmental and consumption externalities and shows which particular policy package is needed to restore optimal social welfare. The third essay investigates important non-pecuniary motives for sustainability behavior that standard models neglect. Framed field experiments of recycling are carried out, the results of which provide evidence for the relevance of social motives for sustainable behavior. The fourth essay explores the impact of bounded rationality and social preferences on stakeholder perceptions of gains and losses and bargaining dynamics in international climate negotiations. Main insights of behavioral economics are systematically applied to explain and predict how various types of stakeholders (citizens, experts, negotiators, politicians, interest groups) will act in climate negotiations. The fifth essay uses a laboratory experiment to assess preferences for, or contributions to, emissions reduction under different – gradual and abrupt – scenarios of natural disasters due to climate change. In conclusion, the present thesis shows that behavioral and experimental economics provide a powerful framework to study individual environmentally-relevant behavior and public decision-making. In addition, various new insights are generated about the preparation and design of environmental agreements and policy.

The 2015 Paris Agreement represents a historic deal in the form of a strong international response to address climate change. This outcome came as a surprise for some, as several controversial issues had been postponed from previous conferences, and were expected to complicate the talks in Paris. One related to the Warsaw International Mechanism on Loss and Damage (L&D), and potential legal remedies for L&D in the form of compensation payments. This issue had been particularly contentious with some developing countries advocating ideas for climate damage liability, which developed countries were unwilling to include in an agreement. Although the negotiations on L&D secured many positive outcomes, Decision 1/CP.21 adopting the Paris Agreement notes that there is no possibility of claiming liability and financial compensation for developing countries. This article, however, argues that, rather than triggering endless compensation claims disputes, a liability mechanism could actually serve as a commitment and reciprocity device, ultimately increasing global policy ambition. In this regard, this article reports the results of two experiments testing the effects of liability rules on the climate policy investment decisions of two players that differ in wealth and vulnerability. Results show that liability rules imposing a responsibility for precaution on both parties increase cooperation significantly, consequentially minimizing risk of L&D occurrence in the first place. Liability rules could thus not only help to address future losses, but also to drive global mitigation and adaptation ambition., Climate Policy, 18 (5)

Cultivated organic soils or peatlands are an important example of emission hotspots. Intensified agricultural activities requiring drainage of peatland lead to the degradation and ultimately in many regions already to the disappearance of these soils. These drained peatlands in turn emit substantial shares of greenhouse gas. Therefore, their conservation in the form of actively rewetting drained peatlands are an important pillar of climate change mitigation policies. This thesis addresses peatland conservation in Switzerland from an economic and policy perspective. The study region for this thesis is the “Seeland” region located in the canton of Bern and characterized by intensive vegetable farming on organic soils. Chapter 1 contributes to a better understanding of the inherent complexities of the management and conservation of cultivated organic soils and provides an overview of the institutional context of peatland utilization and preservation in Switzerland. This chapter draws upon qualitative expert interviews and a literature review. Chapters 2 and 3 focus on the design and evaluation of economic incentives to promote sustainable management of organic soils. Economic experiments conducted with students and farm apprentices are used to test and compare different policies for peatland conservation. Chapter 4 contributes to the academic debate on the role of framing and use of different subject populations with respect to the external validity of experiments. Chapter 1 provides an overview of the current farming situation in the study region and the historical development of the management of organic soils with respect to the institutional and environmental context. It compares the environmental and economic consequences of two land-use development scenarios, namely: pursuing current management practices and adopting sustainable management practices enabling the preservation of the peat. By doing so, chapter 1 contributes to an understanding of the complexity of the issue and provides concrete insights for the Swiss context. It identifies the main challenges that need to be tackled in order to promote a change in current management practices to a more sustainable use of these soils. These challenges include, amongst others, the high profitability of the soils in vegetable farming and the lack of systematic data on the properties and exact distribution of soils in the region. In conclusion, chapter 1 argues for the need of a long-term and comprehensive vision of the management problem supported by a clear policy framework that is able to facilitate a change in the management of organic soils. Chapters 2 and 3 address the policy question by capturing the management issue of organic soils in an innovative economic experiment that is computerized, framed, and interactive. The experiment simulates the decision situation of vegetable producers on organic soils and particularly accounts for the fact that (i) regulation of the water table on these soils requires cooperation among farmers, and (ii) farmers within the same peatland area differ substantially in the soil production potential, and thus in their opportunity costs of adopting sustainable practices. The experiment investigates the potential behavior of farmers when facing the trade-off between continuing vegetable farming versus adopting sustainable use of organic soil that necessitates restricting soil drainage. It combines several complexities that have not been addressed in the broader literature on the design of PES: (i) a two-stage decision problem consisting of a collective choice and an individual land use decision; (ii) the heterogeneity among farmers in opportunity costs for adopting sustainable land use; and (iii) the option for farmers to make side payments within their group. Two basic scenarios were evaluated: without policy intervention and with an agri-environmental payment scheme allocated in exchange for adopting sustainable use of the soils. These scenarios were tested with a static and a dynamic experiment. The static experiment (chapter 2), conducted with university students, represents the resource management problem in general terms. The dynamic experiment (chapter 3), conducted with farm apprentices, more closely represents the management situation by accounting for dynamic changes in soil productivity and opportunity costs. Both chapters evaluate the effectiveness of three payment designs: a uniform agglomeration payment, a differentiated agglomeration payment, and a uniform individual payment. In the static experiment, the uniform payment corresponds to an average of the conservation costs of participating farmers, whereas in the dynamic experiment, it is based on the initial opportunity costs of players. The differentiated agglomeration payment is aligned to players’ opportunity costs. While the difference between the players’ opportunity costs is fixed in the static setting, opportunity costs of players may vary in the dynamic setting. The thesis evaluates the performance of the alternative agri-environmental payment schemes along three main criteria: environmental effectiveness, cost effectiveness, and distributional effects. Using individual surveys, the thesis also examines the links between players’ behavior in the experiment and their social preferences and other individual socio-economic characteristics. Chapters 2 and 3 show that players are more willing to implement sustainable use of organic soils when a payment scheme is present than when this is not the case. Chapter 2 (static experiments) assumes a constrained budget of the governmental agency allocating the subsidies. A uniform payment scheme that is set as average between the costs of players only provides an incentive to players with low costs to cooperate. Despite this and due to payment redistribution via side payments, the environmental effectiveness of uniform payments does not differ from that of the differentiated payment. However, the differentiated payment appears to be more cost effective. Thus, in the presence of asymmetry between farmers and a limited budget, differentiated payments may be more promising in promoting sustainable practices than uniform payments. Chapter 2 also shows that the uniform agglomeration payment induces a higher rate of peat preserved and is more cost-effective than the uniform individual payment. The experiment in Chapter 3 which reflects the temporal dynamics of peat degradation shows that a constant agglomeration payment scheme which is aligned to the players’ initial opportunity costs is more cost- and environmentally-effective than a variable payment scheme that mirrors the respective opportunity costs of farmers over time. This result can be explained by the fact that in the constant payment treatment, players are incentivized to cooperate early on and are then also able to maintain high cooperation levels over the course of the game. The constant payment also results in lower inequality with respect to players payoffs than the variable payment. Therefore, with respect to the promotion of sustainable use of organic soils in Switzerland, constant agglomeration payments appear to be the most promising option. It is acknowledged that in both experiments a significant share of players do not opt for sustainable usage of organic soils even though they have an economic incentive to do so. Possible explanations for this include the risk associated with each of the agglomeration payment types, the considerable opportunity costs characterizing the management problem, and players’ heterogeneity. Furthermore, the social preferences of players as well as other personal characteristics such as risk aversion, opinion of cooperative approaches, farming identity, and care for personal reputation, are identified as important factors that influence the decision and behavior of players. Finally, Chapter 4 explores the robustness of the results obtained in the previous chapters by comparing the behavior of farm apprentices to the behavior of university students and by using a framed and unframed version of the very same experiment. The framed experiment corresponds here to the introduction of a particular context issue related in this case to farming and to the management of organic soils in particular. Thus, it contributes to the discussion on the external validity of results generated by abstract and unframed experiments generally conducted with university students. Chapter 4 shows that the type of subject significantly affects experimental outcomes, particularly in the more and realistic dynamic version of the experiment. This study shows that cooperation is on average significantly higher among university students than among farm apprentices. Nevertheless, subject pool effects do not appear to affect treatment differences as the ranking of the policy instrument with respect to their environmental and cost effectiveness as well as distributional outcomes is similar notwithstanding who participates. Furthermore, comparing behavior of university students in the framed experiment to their behavior in an unframed (abstract) experiment reveals no important differences along the tested criteria.