Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/282366 
Year of Publication: 
2023
Series/Report no.: 
CESifo Working Paper No. 10678
Version Description: 
This Version: October 2023
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
A group of decision makers simultaneously make contributions towards a green fund that reduces the future probability of a climate catastrophe. We derive the theoretical predictions of the effects on contributions arising from `behavioral parameters' such as loss aversion and present-bias; `structural factors' such as variation in the timing of uncertainty; the `demand for a commitment device'; and `institutional factors' such as comparing voluntary contributions with mandatory tax financed contributions. We then run experiments to stringently test our predictions. Loss aversion and present-bias reduce contributions; there is demand for the commitment technology; and voluntary contributions are higher relative to mandatory tax-financed contributions.
Subjects: 
climate risk abatement
loss aversion
present-biased preferences
voluntary versus mandatory contribution mechanisms
commitment technology
JEL: 
C92
D01
D02
D91
Document Type: 
Working Paper
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