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Do Extrinsic Incentives Undermine Social Norms? Evidence from a Field Experiment in Energy Conservation

Author

Listed:
  • José A. Pellerano

    (Universidad Iberoamericana)

  • Michael K. Price

    (Georgia State University
    NBER)

  • Steven L. Puller

    (NBER
    Texas A&M University
    The E2e Project)

  • Gonzalo E. Sánchez

    (ESPOL)

Abstract

Policymakers use both extrinsic and intrinsic incentives to induce consumers to change behavior. This paper investigates whether the use of extrinsic financial incentives is complementary to intrinsic incentives, or whether financial incentives undermine the effect of intrinsic incentives. We conduct a randomized controlled trial that uses information interventions to residential electricity customers to test this question. We find that adding economic incentives to normative messages not only does not strengthen the effect of the latter but may reduce it. These results are consistent with recent theoretical work that suggests a tension between intrinsic motivation and extrinsic incentives.

Suggested Citation

  • José A. Pellerano & Michael K. Price & Steven L. Puller & Gonzalo E. Sánchez, 2017. "Do Extrinsic Incentives Undermine Social Norms? Evidence from a Field Experiment in Energy Conservation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(3), pages 413-428, July.
    • Handle: RePEc:kap:enreec:v:67:y:2017:i:3:d:10.1007_s10640-016-0094-3
    DOI: 10.1007/s10640-016-0094-3
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