European Journal of Law and Economics

, Volume 48, Issue 3, pp 417–438 | Cite as

How to turn crowding-out into crowding-in? An innovative instrument and some law-related examples

  • Antoine Beretti
  • Charles FiguièresEmail author
  • Gilles Grolleau


Using a simple decision-theoretic approach, we formalize how agents with different kinds of intrinsic motivations react to the introduction of monetary incentives. We contend that empirical results supporting the existence of a crowding-out effect under various legal procedures hide a more complex reality, where some individuals contribute thanks to these additional monetary incentives while others reduce their contributions. Our approach allows us to study the theoretical ability of the self selection mechanism (Mellström and Johannesson in J Eur Econ Assoc 6:845–863, 2008; Beretti et al. in Kyklos 66(1):63–77, 2013) to reduce the likelihood to backfire against the cause it is meant to promote. This mechanism consists of a monetary payment for the pro-social behavior and it offers agents the choice to either keep the money for themselves or to direct it to a charity. We show that this legal procedure dominates others more classical procedures because it taps wisely into the motivational heterogeneity of individuals. It uses a self-selection mechanism to match adequate monetary incentives with individuals’ types regarding intrinsic motivations. It may even turn a situation subject to crowding-out into a crowding-in outcome.


Crowding-out Heterogeneity Moral motivation Environmental regulation 

JEL Classification

D03 D64 H23 Q58 



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© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Montpellier SupAgroMontpellierFrance
  2. 2.CNRS, EHESS, Centrale Marseille, IRD, AMSEAix Marseille UniversityMarseilleFrance
  3. 3.Burgundy School of Business-CERENUniversity Bourgogne Franche-ComtéBurgundyFrance
  4. 4.CEE-M, CNRS, INRA, SupagroUniversité de MontpellierMontpellierFrance

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