Regulation of morally responsible agents with motivation crowding
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Lüneburg: Institut für Volkswirtschaftslehre der Universität Lüneburg, 2012. (Working Paper Series in Economics; No. 241).
Research output: Working paper › Working papers
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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 -