Experimental Design Details
Contributions towards a public good:
The main outcome of interest is the contribution towards climate mitigation. Building on Goeschl et al. (2020), the participants will be given money ($15), and the opportunity to contribute to to the purchase of CO2 cap and trade permits to be stored, thus reducing the amount of CO2 in the atmosphere. Money for distribution to CO2 mitigation will only be received after a set of short cognitive tasks to “earn” money. This is to counteract any gift effects (List, 2007). After receiving a “gift” from the experimenter, participants may feel compelled to reciprocate by helping the experimenter find positive results (Zizzo, 2010).
Contribution will be measured, both in absolute terms, and as a percentage of the total endowed money. The use of absolute contributions is typical in the handful of similar experiments which have been conducted(Diederich and Goeschl, 2014; Goeschl et al., 2020; Paetzel et al., 2018; S. Berger and Wyss, 2021). However, Laury and Taylor (2008) found that social preferences were only significantly related to percentage of endowment contributed, not the absolute amount contributed. To be thorough, both possibilities will be examined.
To help participants understand how their contribution will result in reduced carbon being emitted, the function of a cap-and-trade market will be briefly explained, as will the process of retiring permits. The amount of carbon mitigated per dollar will be related to common real world activities, such as transportation or energy use. For example, the price of one ton of CO2 on the California market is around $18. A metric ton of carbon is produced by driving 2,500 miles on average. Therefore the participants would be told “Each dollar contributed is equivalent to driving 140 fewer miles,” equivalent a reduction of 5.5% of a ton of CO2. At this time some of the participants will be provided with one of the two additional language framing treatments, selfish or altruistic. Following recommendations in List et al. (2011), since the neutral language is used as a comparison group for each of the two framing groups, it will receive 50% of the trials, with the remaining 50% of trials being split evenly between the two other framing treatments.
Modified Dictator Game:
A modified dictator game will be used to determine social preferences. Following Kerschbamer (2015), the participants will be told that they will be choosing how to distribute money between themselves and another participant. This method resembles the framework of risk aversion, in that participants are given a set of choices between an equal payoff and a unequal payoff. The payoff structure includes both advantageous and disadvantageous inequality. This method was chosen because it requires relatively few questions in this case only ten binary choices reducing decision fatigue. At the end of the experiment half of the participants will be selected at random to be dictators and half to be recipients. 8 Only one of the ten trials will be paid, also selected at random. This method of paying one of a number of trials is common in the behavioral literature, and is not likely to change participant behavior. (Charness et al., 2016).
As part of the analysis individuals will need to be sorted into social preference types. Kerschbamer (2015) provides a mechanical way to do this based on recipient responses. This will be my primary method of sorting. However, as a robustness check, this project will also engage in latent profile analysis, which seeks to probabilistic sort participants into groups (Bruhin et al., 2019). The similarity or difference with regards to sorting participants between these two methods may be examined in another paper.