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1
Dual Motive Theory in the United States: “I don’t want to
be selling my soul”
Natalia Ovchinnikova, St. Lawrence University Hans Czap, St. Lawrence University
Gary Lynne, University of Nebraska-LincolnChris Larimer, University of Northern Iowa
IAREP/SABE Meeting at LUISS Rome, ItalySeptember 3-6, 2008
Copyright @2008
Permission granted to reproduce for personal and educational use only. Commercial copying, hiring, lending is prohibited.
Theoretical Considerations
3
Self-interest Shared Other-interest
Value Rational Choice
Control
Cognition
Consciousness(Feelings)
AffectiveHedonism, e.g.hunger, sexual drive, pleasure and pain
AffectiveSympathy (“in sympathy with”), e.g. share a meal experience, in unity with others, share an ethic, a norm
Subconscious(Emotional tendencies)
Neural Functioning in Dual Motive (Metaeconomic) Theory
Egocentric Empathetic
Self-interest Shared Other-interest
Value Rational Choice
Control
Cognition
Consciousness(Feelings)
AffectiveHedonism, e.g.hunger, sexual drive, pleasure and pain
AffectiveSympathy (“in sympathy with”), e.g. share a meal experience, in unity with others, share an ethic, a norm
Subconscious(Emotional tendencies)
Neural Functioning in Dual Motive (Metaeconomic) Theory
Egocentric Empathetic
Self-interest Shared Other-interest
Value Rational Choice
Control
Cognition
Consciousness(Feelings)
AffectiveHedonism, e.g.hunger, sexual drive, pleasure and pain
AffectiveSympathy (“in sympathy with”), e.g. share a meal experience, in unity with others, share an ethic, a norm
Subconscious(Emotional tendencies)
Neural Functioning in Dual Motive (Metaeconomic) Theory
Egocentric Empathetic
Sharing and Self-Sacrifice in Both Domains of Interest
7
Sharing and Self-Sacrifice in Both Domains of Interest
8
Two Environmental Economic Experiments
9
10
Background
• CO2 trading:
– European Trading Scheme (ECX)
– Chicago Climate Exchange
• Farmers: carbon sequestration projects -> offsets registered to be sold on the emissions allowance market – Trade offsets against emissions: sell to businesses
represented by the Climate Exchange
– Retire offsets completely: sell or donate to environmental agencies
11
Research questions
• Can environmental agencies effectively compete with business in buying carbon offsets?
• Will offset providers sell their offsets to an environmental group at lower price than to businesses?– If yes, what is the discount?
12
Experiment 1
• Selling offsets– Viking Climate
Exchange– Conservancy Project
• Rounds 10 or 15:– Price premium
increases
• Conditions/priming – Other-interest– Self-interest– Control
• Psychological traits– Empathy– Locus of control– Autism– Selfism/narcissm
• Demographics:– Rural/urban area– Farmer’s family– Gender– Major– Year in school
13
Price premium in Exp. 1
$0$1$2$3$4$5$6$7$8$9
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
VCX
CP
14
Av. proportion of offsets sold to Conservancy Project in Exp. 1
0,0
0,2
0,4
0,6
0,8
1,0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Round
Self-interest
Other-interest
Control
30% line
Average
15
Proportion of offsets sold to the Conservancy Project (Exp1)
Variable Model 1A Model 1B
Constant 1.094*** .340***
px_pc -.080*** -.009*
prop_cp(lag-1) .738***
d_other .060** .024d_self .002 .000d_rd10 .017 .002d_famfarm -.072*** -.017d_rural .054** .014d_business -.087*** -.023d_freshman -.099** -.029d_female -.010 -.013Empathy .123*** .039***Control -.134*** -.055***Autism -.052*** -.019Selfism -.048*** -.017**
Model: GLM (MLE)
Akaike Info criterion: Model 1A: 431.4Model 1B: -348.3
Sig: * 10%, ** 5%*** 1%
16
Proportion of offsets sold to the Conservancy Project (Exp1)
Variable Model 1A Model 1B
Constant 1.094*** .340***
px_pc -.080*** -.009*
prop_cp(lag-1) .738***
d_other .060** .024d_self .002 .000d_rd10 .017 .002d_famfarm -.072*** -.017d_rural .054** .014d_business -.087*** -.023d_freshman -.099** -.029d_female -.010 -.013Empathy .123*** .039***Control -.134*** -.055***Autism -.052*** -.019Selfism -.048*** -.017**
Model: GLM (MLE)
Akaike Info criterion: Model 1A: 431.4Model 1B: -348.3
Sig: * 10%, ** 5%*** 1%
17
Experiment 2
• Selling offsets– VCX– CP
• Rounds – 25:– Price decrease
– Price increase • Conditions/priming
– Other-interest– Self-interest– Control
• NO Psychological questions
• Demographics:– Rural/urban area– Farmer’s family– Gender– Major– Year in school
18
Price dynamics in Exp. 2
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
1 3 5 7 9 11 13 15 17 19 21 23 25
VCX
CP
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
1 3 5 7 9 11 13 15 17 19 21 23 25
VCX
CP
Price increase
Price decrease
19
Av. proportion of offsets sold to Conservancy Project in Exp. 2
0,0
0,2
0,4
0,6
0,8
1,0
1 3 5 7 9 11 13 15 17 19 21 23 25
Round
Av_PriceIncr
Av_PriceDecr
20
Proportion of offsets sold to the Conservancy Project (Exp2)
Variable Model 2F Model 2G
Constant .449*** .190***
Price_CP .161*** .061***
Price_VCX -.130*** -.051***
Prop_cp_lag-1 .707***
d_other .001 .001
d_self -.073*** -.017
d_pr incr .018 -.002
d_pr prem_incr .036** -.074***
d_1st round .427***
d_25thround .327***
d_famfarm -.030* -.008
d_rural .070*** .023*
d_business .005 -.004
d_female .002 -.001
Model: GLM (MLE)
Akaike Info criterion: Model 2F: 733.8Model 2G: 428.2
Sig: * 10%, ** 5%*** 1%
21
Proportion of offsets sold to the Conservancy Project (Exp2)
Variable Model 2F Model 2G
Constant .449*** .190***
Price_CP .161*** .061***
Price_VCX -.130*** -.051***
Prop_cp_lag-1 .707***
d_other .001 .001
d_self -.073*** -.017
d_pr incr .018 -.002
d_pr prem_incr .036** -.074***
d_1st round .427***
d_25thround .327***
d_famfarm -.030* -.008
d_rural .070*** .023*
d_business .005 -.004
d_female .002 -.001
Model: GLM (MLE)
Akaike Info criterion: Model 2F: 733.8Model 2G: 428.2
Sig: * 10%, ** 5%*** 1%
22
Effect of psychological traits : Exp. 1 vs 2
Variable Model 1H Model 1I Model 2H Model 2I
Constant .649*** .080*** .578*** .170***
px_pc -.081*** -.005 -.205*** -.063***
Prop_cp_lag-1 .792*** .692***
d_other .062** .023 .012 .004
d_self .026 .009 -.056*** -.014
Akaike’s info criterion
588.5 -329.1 881.0 -196.0
Model: GLM (MLE)
Sig: * 10%, ** 5%*** 1%
23
Effect of psychological traits : Exp. 1 vs 2
Variable Model 1H Model 1I Model 2H Model 2I
Constant .649*** .080*** .578*** .170***
px_pc -.081*** -.005 -.205*** -.063***
Prop_cp_lag-1 .792*** .692***
d_other .062** .023 .012 .004
d_self .026 .009 -.056*** -.014
Akaike’s info criterion
588.5 -329.1 881.0 -196.0
Model: GLM (MLE)
Sig: * 10%, ** 5%*** 1%
24
Conclusions
• Environmental agencies can buy offsets at a lower-than-market price
• Increase in price premium of VCX relative to CP decreases the number of offsets sold to CP– Even with a Price premium of 300% a positive
amount of offsets is sold to CP
• Self-reflections on “who I am” and “how do I treat others” increase contributions to the environmental good
• Path dependency of selling behavior
Conclusions…• Support for the dual motive model:
– Subjects sought balance in their interests
– Subjects were willing to sacrifice in both domains of interest
– Priming stirred their rational consideration and reconsideration of which interests they would pursue
– Mutual tempering of interests leads to truly rational choice
25
26
Thank you