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Incentivized Payments in Experimental Games Can Lead to Behavioural Change

¹ZEW – Leibniz Centre for European Economic Research, Germany
²International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), Innovation Systems for the Drylands, India
³University of Marburg, Sustainable Use of Natural Resources, Germany

Abstract

Unstainable water usage is a widespread environmental problem in developing countries. As the gap between water supply and demand is widening, local to global conflicts increase in number and intensity. Addressing unsustainable use of water requires an understanding of users’ behaviour and how the same can be influenced. Our research paper investigates environmental behaviour in the context of agricultural water management challenges.
Especially economic experiments are a powerful tool to study behaviour and causal mechanisms in human interactions. Lately, more and more experimenters observe that these experiments also support learning and behavioural change. Consequently over the last years, games have been increasingly applied as intervention tools in natural resource governance with a strong capacity development purpose promoting behavioural change. While there appears to be a growing understanding on how monetary incentives influence decision-making within experiments, less research investigates how monetary incentives matter or interfere with collective action outside the experiment.
In a framed field experiment about water management in rural India, we compare individual incentivized payments with non-incentivized payments. Our results show little evidence for different behaviour in the game but we find some evidence that incentivized payments increase the probability to observe real-life behavioural change after the game compared to a control group without game intervention. This effect most likely arises as participants take the exercise more serious and deliberate with a higher degree of commitment. Our work is relevant concerning methodological advances in the field of experimental methods to study environmental behaviour but more importantly, has implications on the design of more effective and efficient behavioural change intervention tools.

Keywords: Collective action, games for sustainability, impact assessment, India, monetary incentives, social learning, water management

Contact Address: Lara Bartels, ZEW – Leibniz Centre for European Economic Research, Mannheim, Germany, e-mail: lara.bartelszew.de