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Publication
When is green too rosy? Evidence from a laboratory market experiment on green goods and externalities
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Advisor(s)
Abstract(s)
In a context where sustainable consumption and production need to be encouraged,
economic experiments can provide significant insights into how individuals consider environmental
externalities in their choices and how public policy can foster the environmental public good.
Experimental studies aiming to evaluate market mitigation of externalities through the provision of
green goods usually choose to adopt neutral language in terms of framing. Our study implements
an incentivized economics experiment to explore how supply and demand consider negative
externalities. Furthermore, the study addresses the impact of using non-abstract wording when
describing negative externalities. Two types of goods can be produced and bought, namely goods
generating negative externalities on other consumers (either labelled as B or brown) and goods that
cause no harm to others (either labelled A or green). We conclude that the provision of green goods
increases from 18.1% in the abstract frame to 70% in the environmental frame. Framing is, therefore,
a relevant variable for the outcome of this experimental market. This has important implications
for economic experiments aiming to evaluate pro-environmental behaviours and provide policy
orientations for the provision of green goods.
Description
Keywords
Laboratory experiments Framing effect Abstract instructions Green goods Public goods External validity Pro-environmental behaviour
Citation
Fernandes, M.E.; Valente, M. When Is Green Too Rosy? Evidence from a Laboratory Market Experiment on Green Goods and Externalities. Games 2018, 9, 70.