Competition and norms: A self-defeating combination?

Genevieve Alberts,Zeynep Gurguc,Pantelis Koutroumpis,Ralf Martin,Mirabelle Muûls,Tamaryn Napp

doi:10.1016/j.enpol.2016.06.001

Abstract

This paper investigates the effects of information feedback mechanisms on electricity and heating usage at a student hall of residence in London. In a randomised control trial, we formulate different treatments such as feedback information and norms, as well as prize competition among subjects. We show that information and norms lead to a sharp – more than 20% - reduction in overall energy consumption. Because participants do not pay for their energy consumption this response cannot be driven by cost saving incentives. Interestingly, when combining feedback and norms with a prize competition for achieving low energy consumption, the reduction effect – while present initially – disappears in the long run. This could suggest that external rewards reduce and even destroy intrinsic motivation to change behaviour.

Highlights

IntroductionWhen combining feedback and norms with a prize competition for achieving low energy consumption, the reduction effect – while present initially – disappears in the long run
This paper investigates the effects of information feedback mechanisms on electricity and heating usage at a student hall of residence in London
As one third of all greenhouse gas emissions come from residential energy consumption (EPA, 2015), understanding how social dynamics can impact household energy demand is an important step in this direction

Summary

Introduction

When combining feedback and norms with a prize competition for achieving low energy consumption, the reduction effect – while present initially – disappears in the long run. This could suggest that external rewards reduce and even destroy intrinsic motivation to change behaviour. We provide some evidence suggesting that this dropping off is caused by a reversal of efforts by individuals who realise that the prize is out of their reach as a consequence of the information treatment This hints at a fundamentally different response mechanism when providing a prize: by strengthening external financial incentives, internal incentives such as the desire to reduce consumption because of detrimental social effects – e.g. through pollution – are weakened. These results indicate the need to discover mechanisms that effectively induce lower energy consumption at the household level

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