Social Sciences (miscellaneous); Economics and Econometrics
Abstract :
[en] We experimentally investigate the impact of information disclosure on managing common harms that are caused jointly by a group of liable agents. Subjects interact in a public bad setting and must choose ex ante how much to contribute in order to reduce the probability of causing a common damage. If a damage occurs, subjects bear a part of the loss according to the liability-sharing rule in force. We consider two existing rules: a per capita rule and a proportional rule. Our aim is to analyze the relative impact of information disclosure under each rule. We show that information disclosure increases contributions only under a per capita rule. This result challenges the classical results regarding the positive effects of information disclosure, since we show that this impact may depend upon the legal context. We also show that while a proportional rule leads to higher contributions than a per capita one, the positive effect of disclosure on a per capita rule makes it as efficient as a proportional rule without information disclosure.
Disciplines :
Economic systems & public economics
Author, co-author :
Jacob, Julien; Université de Strasbourg, CNRS, BETA, Strasbourg, France
Lambert, Eve-Angéline; Université de Lorraine, CNRS, BETA, Nancy, France
Lefebvre, Mathieu ; Université de Liège - ULiège > Ecole de Gestion de l'Université de Liège ; Aix Marseille Université, CNRS, AMSE, Marseille, France
Van Driessche, Sarah; Université de Lorraine, CNRS, BETA, Nancy, France
Language :
English
Title :
Information disclosure under liability: an experiment on public bads
Publication date :
July 2023
Journal title :
Social Choice and Welfare
ISSN :
0176-1714
eISSN :
1432-217X
Publisher :
Springer Science and Business Media Deutschland GmbH
This research has been conducted with the financial support of the CPER Ariane. This work was also supported by the French National Research Agency Grant ANR-17-EURE-0020, and by the Excellence Initiative of Aix-Marseille University - A*MIDEX. The authors gratefully acknowledge Kene Boun My, Yannick Gabuthy, and the Laboratory of Experimental Economics of Strasbourg (LEES). Comments from two anonymous referees were also very useful in improving the paper.
Afsah S, Laplante B, Wheeler D (1996) Controlling industrial pollution—a new paradigm. The World Bank—Policy Research Working Paper 1672
Andreoni J (1988) Why free ride?: Strategies and learning in public goods experiments. J Public Econ 37:291–304 DOI: 10.1016/0047-2727(88)90043-6
Andreoni J, Petrie R (2004) Public goods experiments without confidentiality: a glimpse into fund-raising. J Public Econ 88:1605–1623 DOI: 10.1016/S0047-2727(03)00040-9
Angelova V, Armantier O, Attanasi G, Hiriart Y (2014) Relative performance of liability rules: experimental evidence. Theory Decis 77:531–556 DOI: 10.1007/s11238-013-9405-0
Attanasi G, Georgantzís N, Rotondi V, Vigani D (2018) Lottery- and survey-based risk attitudes linked through a multichoice elicitation task. Theory Decis 84:341–372 DOI: 10.1007/s11238-017-9613-0
Attanasi G, Concina L, Kamaté C, Rotondi V (2020) Firm’s protection against disasters: are investment and insurance substitutes or complements? Theory Decis 88:121–151 DOI: 10.1007/s11238-019-09703-w
Bennear LS, Olmstead SM (2008) The impacts of the “right to know": information disclosure and the violation of drinking water standards. J Environ Econ Manag 56:117–130 DOI: 10.1016/j.jeem.2008.03.002
Bernasconi M, Corazzini L, Seri R (2014) Reference dependent preferences, hedonic adaptation and tax evasion: does the tax burden matter? J Econ Psychol 40:103–118 DOI: 10.1016/j.joep.2013.01.005
Blackman A, Afsah S, Ratunanda D (2004) How do public disclosure pollution control programs work? Evidence from Indonesia. Hum Ecol Rev 11:235–246
Blanco E, Lopez MC, Walker JM (2016) The opportunity costs of conservation with deterministic and probabilistic degradation externalities. Environ Resour Econ 64:255–273 DOI: 10.1007/s10640-014-9868-7
Blanco E, Haller T, Walker JM (2017) Externalities in appropriation: responses to probabilistic losses. Exp Econ 20:793–808 DOI: 10.1007/s10683-017-9511-x
Boun My K, Ouvrard B (2019) Nudge and tax in an environmental public goods experiment: Does environmental sensitivity matter? Resour Energy Econ 55:24–48 DOI: 10.1016/j.reseneeco.2018.10.003
Bramoullé Y, Orset C (2018) Manufacturing doubt. J Environ Econ Manag 90:119–133 DOI: 10.1016/j.jeem.2018.04.010
Brown J (1973) Towards an economic theory of liability. J Legal Stud 2:323–349 DOI: 10.1086/467501
Brown-Kruse J, Hummels D (1993) Gender effects in laboratory public goods contributions. J Econ Behav Organ 22:255–267 DOI: 10.1016/0167-2681(93)90001-6
Buchens C, Deffains B, Palermo A (2019) Stigmatization, liability and public enforcement of law. Revue d’economie politique 129:235–259 DOI: 10.3917/redp.292.0235
Calabresi G (1970) The cost of accidents, a legal and economic analysis. Yale University Press, New Haven
Capelle-Blancard G, Laguna M-A (2010) How does the stock market respond to chemical disasters? J Environ Econ Manag 59:192–205 DOI: 10.1016/j.jeem.2009.11.002
Cohen MD, Burkhart R, Dosi G, Egidi M, Marengo L, Warglien M, Winter S (1996) Routines and other recurring action patterns of organizations: contemporary research issues. Ind Corp Change 5(3):653–698 DOI: 10.1093/icc/5.3.653
Crosetto P, Filippin A (2016) A theoretical and experimental appraisal of four risk elicitation methods. Exp Econ 19:613–641 DOI: 10.1007/s10683-015-9457-9
Croson RTA (2007) Theories of commitment, altruism and reciprocity: evidence from linear public goods games. Econ Inq 45:199–216 DOI: 10.1111/j.1465-7295.2006.00006.x
Croson R, Fatas E, Neugebauer T, Morales AJ (2015) Excludability: a laboratory study on forced ranking in team production. J Econ Behav Organ 114:13–26 DOI: 10.1016/j.jebo.2015.03.005
de Groot JI, Schuitema G (2012) How to make the unpopular popular? Policy characteristics, social norms and the acceptability of environmental policies. Environ Sci Policy 19–20:100–107 DOI: 10.1016/j.envsci.2012.03.004
Deffains B, Fluet C (2013) Legal liability when individuals have moral concerns. J Law Econ Organ 29:930–955 DOI: 10.1093/jleo/ews002
Deffains B, Espinosa R, Fluet C (2019) Laws and norms: experimental evidence with liability rules. Int Rev Law Econ 60:1–16 DOI: 10.1016/j.irle.2019.105858
Eckel CC, Grossman PJ (2002) Sex differences and statistical stereotyping in attitudes toward financial risk. Evol Hum Behav 23:281–295 DOI: 10.1016/S1090-5138(02)00097-1
Endres A, Bertram R (2006) The development of care technology under liability law. Int Rev Law Econ 26:503–518 DOI: 10.1016/j.irle.2007.01.004
Endres A, Bertram R, Rundshagen B (2008) Environmental liability law and induced technical change: the role of spillovers. J Inst Theor Econ 164:254–279 DOI: 10.1628/093245608784514446
Environment Agency of United Kingdom, E. A. U. K. (2022) https://www.gov.uk/government/publications/water--and--sewerage--companies--in--england--environmental--performance--report--2020/water--and--sewerage--companies--in--england--environmental--performance--report--for--2020
EPA (2021) Water firms discharged raw sewage into English waters 400,000 times last year. Available at: https://www.theguardian.com/environment/2021/mar/31/water--firms--discharged--raw--sewage--into--english--waters--400000--times--last--year
Ferrey S (2009) Inverting the law: superfund hazardous substance liability and supreme court reversal of all federal circuits. William Mary Environ Law Policy Rev 33:633–722
Fischbacher U, Gächter S (2010) Social preferences, beliefs, and the dynamics of free riding in public goods experiments. Am Econ Rev 100:541–556 DOI: 10.1257/aer.100.1.541
Flambard V, Le Lec F, Romaniuc R (2020) How does risk affect collective participation? Public good provision versus public bad prevention. Mimeo, New York
Foulon J, Lanoie P, Laplante B (2002) Incentives for pollution control: regulation or information? J Environ Econ Manag 44:169–187 DOI: 10.1006/jeem.2001.1196
Gächter S, Renner E (2010) The effects of (incentivized) belief elicitation in public goods experiments. Exp Econ 13:364–377 DOI: 10.1007/s10683-010-9246-4
García JH, Sterner T, Afsah S (2007) Public disclosure of industrial pollution: the PROPER approach for Indonesia? Environ Dev Econ 12:739–756 DOI: 10.1017/S1355770X07003920
García JH, Afsah S, Sterner T (2009) Which firms are more sensitive to public disclosure schemes for pollution control? Evidence from Indonesia’s PROPER Program. Environ Resource Econ 42:151–168 DOI: 10.1007/s10640-008-9211-2
German Federal Ministry of Justice, G. F. M. J. (2022) https://www.gesetze--im--internet.de/englisch_bgb/englisch_bgb.html
Gonenc H, Scholtens B (2017) Environmental and financial performance of fossil fuel firms: a closer inspection of their interaction environmental and financial performance of fossil fuel firms: a closer inspection of their interaction environmental and financial performance of fossil fuel firms: a closer inspection of their interaction. Ecol Econ 132:307–328 DOI: 10.1016/j.ecolecon.2016.10.004
Greiner B (2015) Subject pool recruitment procedures: organizing experiments with ORSEE. J Econ Sci Assoc 1:114–125 DOI: 10.1007/s40881-015-0004-4
Hocquet-Berg S (2017) Répartition de la dette de réparation des dommages causés par le DES en fonction des parts de marché, CA Versailles, 14 avril 2016, RG no 16/00296. Revue générale du droit (online). www.revuegeneraledudroit.eu/?p=25012
Huet-Vaughn E, Muller N, Hsu Y-C (2018) Livestreaming pollution: a new form of public disclosure and a catalyst for citizen engagement? NBER working paper 24664
Jacob J, Lambert E-A, Garcia S (2022) Efficiency of liability-sharing rules: an experimental case. J Inst Theor Econ (JITE) 178:1–42 DOI: 10.1628/jite-2022-0001
Jacquet J, Jamieson D (2016) Soft but significant power in the Paris Agreement. Nat Clim Change 6:643–646 DOI: 10.1038/nclimate3006
Kahneman D, Tversky A (1973) Availability: a heuristic for judging frequency and probability. Cogn Psychol 5:207–232 DOI: 10.1016/0010-0285(73)90033-9
Keser C, Montmarquette C (2008) Voluntary contributions to reduce expected public losses. J Econ Behav Organ 66:477–491 DOI: 10.1016/j.jebo.2006.06.007
Konar S, Cohen MA (1997) Information as regulation: the effect of community right to know laws on toxic emissions. J Environ Econ Manag 32:109–124 DOI: 10.1006/jeem.1996.0955
Kornhauser LA, Revesz RL (1989) Sharing damages among multiple tortfeasors. Yale Law J 98:831–884 DOI: 10.2307/796581
Kornhauser LA, Revesz RL (1990) Apportioning damages among potentially insolvent actors. J Leg Stud 19:617–651 DOI: 10.1086/467864
Kornhauser L, Schotter A (1990) An experimental study of single-actor accidents. J Leg Stud 19:203–233 DOI: 10.1086/467848
Kornhauser L, Schotter A (1992) An experimental study of two-actor accidents. C.V. Starr Center for applied economics—economic research report
Lopez-Perez R (2010) Guilt and shame: an axiomatic analysis. Theor Decis 69:569–586 DOI: 10.1007/s11238-009-9132-8
Maestre-Andres S, Drews S, van den Bergh J (2019) Perceived fairness and public acceptability of carbon pricing: a review of the literature. Clim Policy 19:1186–1204 DOI: 10.1080/14693062.2019.1639490
Nalbantian HR, Schotter A (1997) Productivity under group incentives: an experimental study. Am Econ Rev 87(3):314–341
Nielsen K (2019) Dynamic risk preferences under realized and paper outcomes. J Econ Behav Organ 161:68–78 DOI: 10.1016/j.jebo.2019.03.016
Pien C-P (2020) Local environmental information disclosure and environmental non-governmental organizations in Chinese prefecture-level cities. J Environ Manag 275:211–225 DOI: 10.1016/j.jenvman.2020.111225
Pinkowski B (1996) Simplifying CERCLA defenses to liability. Urban Lawyer 28:197–221
Powers N, Blackman A, Lyon TP, Narain U (2011) Does disclosure reduce pollution? Evidence from India’s Green Rating Project. Environ Resour Econ 50:131–155 DOI: 10.1007/s10640-011-9465-y
Rege M, Telle K (2004) The impact of social approval and framing on cooperation in public good situations. J Public Econ 88:1625–1644 DOI: 10.1016/S0047-2727(03)00021-5
Samek A, Sheremeta R (2014) Recognizing contributors: an experiment on public goods. Exp Econ 17:673–690 DOI: 10.1007/s10683-013-9389-1
Schatz A (2008) Regulating greehouse gases by mandatory information disclosure. VA Environ Law J 26:335–393
Shavell S (1980) Strict liability versus negligence. J Legal Stud 9:1–25 DOI: 10.1086/467626
Soetevent A (2005) Anonimity in giving in a natural context—a field experiment in 30 churches. J Public Econ 89:2301–2323 DOI: 10.1016/j.jpubeco.2004.11.002
Sonnemans J, Schram A, Offerman T (1998) Public good provision and public bad prevention: the effect of framing. J Econ Behav Organ 34:143–161 DOI: 10.1016/S0167-2681(97)00042-5
Steg L, Groot JIMD, Dreijerink L, Abrahamse W, Siero F (2011) General antecedents of personal norms, policy acceptability, and intentions: the role of values, worldviews, and environmental concern. Soc Nat Resour 24:349–367 DOI: 10.1080/08941920903214116
Tadelis S (2011) The power of shame and the rationality of trust. Haas School of Business Working Paper
Thaler R, Johnson E (1990) Gambling with the house money and trying to break even: the effects of prior outcomes on risky choice. Manag Sci 36:643–660 DOI: 10.1287/mnsc.36.6.643
Tietenberg T (1998) Disclosure strategies for pollution control. Environ Resour Econ 11:587–602 DOI: 10.1023/A:1008291411492
Walker JM, Gardner R (1992) Probabilistic destruction of common-pool resources: experimental evidence. Econ J 102:1149–1161 DOI: 10.2307/2234382
