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Environmental and Resource Economics

, Volume 67, Issue 3, pp 413–428 | Cite as

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

  • José A. Pellerano
  • Michael K. PriceEmail author
  • Steven L. Puller
  • Gonzalo E. Sánchez
Article

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.

Keywords

Behavioral economics Field experiments Energy conservation Normative appeals 

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Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  • José A. Pellerano
    • 1
  • Michael K. Price
    • 2
    • 3
    Email author
  • Steven L. Puller
    • 3
    • 4
    • 5
  • Gonzalo E. Sánchez
    • 6
  1. 1.Department of EconomicsUniversidad IberoamericanaSanto DomingoDominican Republic
  2. 2.Department of EconomicsGeorgia State UniversityAtlantaUSA
  3. 3.NBERCambridgeUSA
  4. 4.Department of EconomicsTexas A&M UniversityCollege StationUSA
  5. 5.The E2e ProjectBangaloreIndia
  6. 6.Facultad de Ciencias Sociales y Humanísticas, Escuela Superior Politécnica del LitoralESPOLGuayaquilEcuador

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