Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73174
Authors: 
Fünfgelt, Joachim
Baumgärtner, Stefan
Year of Publication: 
2012
Series/Report no.: 
University of Lüneburg Working Paper Series in Economics 241
Abstract: 
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.
Subjects: 
Altruism
externality
moral motivation
motivation crowding
Pareto efficiency
regulation
responsibility
taxes
provision of information
JEL: 
D03
D11
D62
H23
Q58
Document Type: 
Working Paper

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