Energy saving in a simulated environment: An online experiment of the interplay between nudges and financial incentives
Fanghella V., Ploner M., Tavoni M., (2021), Energy saving in a simulated environment: An online experiment of the interplay between nudges and financial incentives, Journal of Behavioral and Experimental Economics, Volume 93, August 2021, 101709, DOI: 10.1016/j.socec.2021.101709, webpage
Though nudges are gaining attention as complements to financial incentives, evidence of the interplay between these two policy instruments is lacking. Here, we discuss and evaluate how combinations of financial policies and nudges affect behaviors. Through a framed online experiment, we assess the effect of combining financial incentives (monetary reward) with nudges (goal setting and feedback). We introduce an innovative incentive-compatible energy-saving task: participants optimize their virtual energy consumption on a simulated washing machine. Our findings do not show evidence of synergies between traditional and behavioral interventions. On the contrary, the nudge seems to divert participants’ attention from the financial incentive.