Persistence or reversal? The micro-effects of time-varying financial penalties
Duncan Mortimer, Anthony Harris, Jasper S Wijnands, Mark Stevenson
JOURNAL OF ECONOMIC BEHAVIOR & ORGANIZATION | ELSEVIER | Published : 2021
Many financial incentives are time-varying due to the presence of time-limits, benefit ceilings and/or penalty thresholds. The potentially perverse effects of providing and then withdrawing financial incentives are now well-known. Whether or not these potentially perverse effects extend to other patterns of temporal variation remains unclear. The present study investigates the impact of temporal variation on the overall effectiveness of financial penalties for risky driving behaviours. Based on secondary analysis of data from a randomised field experiment, we find evidence for reductions in the target behaviour (relative to control) rather than habit persistence when penalties were temporari..View full abstract
Related Projects (2)
Awarded by Australian Research Council
Awarded by National Health and Medical Re-search Council
This work was supported by the Australian Research Council (LP150100680) and the National Health and Medical Re-search Council (APP1136250) . The authors thank Katherine Scully and Mike Adams for assistance with administering the experimental protocol. We are also grateful to three anonymous referees for their thoughtful comments.