TY - UNPB

T1 - Regulation of morally responsible agents with motivation crowding

AU - Fünfgelt, Joachim

AU - Baumgärtner, Stefan

PY - 2012

Y1 - 2012

N2 - We study the regulation of a morally responsible agent in the context of a negative consumption externality and motivation crowding. In particular, we analyze how various governmental interventions affect the agent’s motivation to assume moral responsibility.Employing a motivation-crowding model, we find that morally motivated behavior will, in general, not ensure Pareto efficiency without intervention. A Pigouvian tax may be efficient under motivation crowding. But the efficient taxe rate needs to be higher, which may lead to a full crowding-out of moral motivation. By contrast, an inefficiently low taxe rate may increase the market failure due to motivation crowding. Provision of information is efficient only in very specific cases but may be effective in reducing the extent of market failure. A complementary tax-and-information policy approach is superior to a tax as single instrument if its aim is to reduce consumption and if provision of information raises moral motivation.

AB - We study the regulation of a morally responsible agent in the context of a negative consumption externality and motivation crowding. In particular, we analyze how various governmental interventions affect the agent’s motivation to assume moral responsibility.Employing a motivation-crowding model, we find that morally motivated behavior will, in general, not ensure Pareto efficiency without intervention. A Pigouvian tax may be efficient under motivation crowding. But the efficient taxe rate needs to be higher, which may lead to a full crowding-out of moral motivation. By contrast, an inefficiently low taxe rate may increase the market failure due to motivation crowding. Provision of information is efficient only in very specific cases but may be effective in reducing the extent of market failure. A complementary tax-and-information policy approach is superior to a tax as single instrument if its aim is to reduce consumption and if provision of information raises moral motivation.

KW - Sustainability sciences, Management & Economics

KW - Altruism

KW - externality

KW - moral motivation

KW - motivation crowding

KW - Pareto efficiency

KW - regulation

KW - responsibility

KW - taxes

KW - provision of information

KW - Economics

KW - Altruism

KW - externality

KW - moral motivation

KW - motivation crowding

KW - Pareto efficiency

KW - regulation

KW - responsibility

KW - taxes

KW - provision of information

M3 - Working papers

T3 - Working Paper Series in Economics

BT - Regulation of morally responsible agents with motivation crowding

PB - Institut für Volkswirtschaftslehre der Universität Lüneburg

CY - Lüneburg

ER -