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Is Regulation by Milestones Efficiency Enhancing? - An Experimental Study of Environmental Protection -

Author

Listed:
  • Andreas Freytag

    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

  • Werner Güth

    (Max Planck Institute of Economics, Strategic Interaction Group)

  • Hannes Koppel

    (Max Planck Institute of Economics, Jena)

  • Leo Wangler

    (School of Economics and Business Administration, Friedrich-Schiller-University Jena)

Abstract

Viewing individual contributions as investments in emission reduction we rely on the familiar linear public goods- game to set global reduction targets which, if missed, imply that all payoffs are destroyed with a certain probability. Regulation by milestones does not only impose a final reduction target but also intermediate ones. In our leading example the regulating agency is Mother Nature but our analysis can, of course, be applied to other regulating agencies as well. We are mainly testing for milestone effects by varying the size of milestones in addition to changing the marginal productivity of individual contributions and the probability to lose.

Suggested Citation

  • Andreas Freytag & Werner Güth & Hannes Koppel & Leo Wangler, 2010. "Is Regulation by Milestones Efficiency Enhancing? - An Experimental Study of Environmental Protection -," Jena Economics Research Papers 2010-086, Friedrich-Schiller-University Jena.
    • Handle: RePEc:jrp:jrpwrp:2010-086
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    Cited by:

    1. Doruk İriş & Jungmin Lee & Alessandro Tavoni, 2015. "Delegation and public pressure in a threshold public goods game: theory and experimental evidence," GRI Working Papers 186, Grantham Research Institute on Climate Change and the Environment.
    2. Doruk İriş & Jungmin Lee & Alessandro Tavoni, 2015. "Delegation and public pressure in a threshold public goods game: theory and experimental evidence," GRI Working Papers 186, Grantham Research Institute on Climate Change and the Environment.
    3. Urs Fischbacher & Werner Güth & M. Vittoria Levati, 2011. "Crossing the Point of No Return: A Public Goods Experiment," Jena Economics Research Papers 2011-059, Friedrich-Schiller-University Jena.
    4. Ilona Reindl, 2022. "Wealth and Vulnerability to Climate Change: An Experimental Study on Burden Sharing among Heterogeneous Agents," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 791-823, August.
    5. Sarah Al Doyaili & Leo Wangler, 2013. "International climate policy: does it matter? An empirical assessment," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 2(3), pages 288-302, November.
    6. Robert Böhm & Özgür Gürerk & Thomas Lauer, 2020. "Nudging Climate Change Mitigation: A Laboratory Experiment with Inter-Generational Public Goods," Games, MDPI, vol. 11(4), pages 1-20, October.
    7. Nerhagen, Lena & Brandt, Daniel & Mortazavi, Reza, 2023. "Use of public transport as a means to reach national climate objectives - On the importance of accounting for spatial differences and costs," Transport Policy, Elsevier, vol. 131(C), pages 56-65.
    8. Nisvan Erkal & Boon Han Koh & Nguyen Lam, 2023. "Using Milestones as a Source of Feedback in Teamwork: Insights from a Dynamic Voluntary Contribution Mechanism," Discussion Papers 2310, University of Exeter, Department of Economics.

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    More about this item

    Keywords

    Cumulative Public Goods; Milestones; Climate Change; Experiment.;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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