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Curbing Energy Consumption through Voluntary Quotas: Experimental Evidence

Author

Listed:
  • Nicola Campigotto
  • Marco Catola
  • Simone D’Alessandro
  • Pietro Guarnieri
  • Lorenzo Spadoni

Abstract

This paper explores the potential of voluntary consumption quotas as a strategy to address resource supply shortages. The results of an incentivized online experiment are presented in which a Nash demand game was used to model an energy consumption problem. Participants had the option to join an energy conservation programme by accepting a consumption quota. Those who accepted the quota traded off their maximum demand for energy in exchange for the certainty that their demand would be met, while those who rejected the quota could demand and possibly earn more but risked suffering from a power outage, in which case they received nothing. Three different quota schemes are examined, and their policy implications are discussed. Our findings suggest that voluntary quotas may lead to a significant decrease in overall demand and contribute to enhancing consumption security.

Suggested Citation

  • Nicola Campigotto & Marco Catola & Simone D’Alessandro & Pietro Guarnieri & Lorenzo Spadoni, 2023. "Curbing Energy Consumption through Voluntary Quotas: Experimental Evidence," Discussion Papers 2023/299, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    • Handle: RePEc:pie:dsedps:2023/299
    Note: ISSN 2039-1854
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    File URL: https://www.ec.unipi.it/documents/Ricerca/papers/2023-299.pdf
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    References listed on IDEAS

    as
    1. Calzolari, Giacomo & Casari, Marco & Ghidoni, Riccardo, 2018. "Carbon is forever: A climate change experiment on cooperation," Journal of Environmental Economics and Management, Elsevier, vol. 92(C), pages 169-184.
    2. Anderies, John M. & Janssen, Marco A. & Lee, Allen & Wasserman, Hannah, 2013. "Environmental variability and collective action: Experimental insights from an irrigation game," Ecological Economics, Elsevier, vol. 93(C), pages 166-176.
    3. Bernard, Mark & Dreber, Anna & Strimling, Pontus & Eriksson, Kimmo, 2013. "The subgroup problem: When can binding voting on extractions from a common pool resource overcome the tragedy of the commons?," Journal of Economic Behavior & Organization, Elsevier, vol. 91(C), pages 122-130.
    4. Daniel W. O’Neill & Andrew L. Fanning & William F. Lamb & Julia K. Steinberger, 2018. "A good life for all within planetary boundaries," Nature Sustainability, Nature, vol. 1(2), pages 88-95, February.
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    Cited by:

    1. Pietro Guarnieri & Lorenzo Spadoni, 2024. "Norms and anti-coordination: elicitation and priming in an El Farol Bar Game experiment," Discussion Papers 2024/303, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

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    More about this item

    Keywords

    energy consumption; online experiment; Nash demand game; power outages; voluntary quotas;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C99 - Mathematical and Quantitative Methods - - Design of Experiments - - - Other
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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