Innovation and Information Acquisition Under Time Inconsistency and Uncertainty

We propose to analyse the hyperbolic discounting preferences effect on the innovator's research investment decision. Investing in research allows him to acquire information, and then to reduce the uncertainty of the risks of his project. We find that whatever the innovator's preferences, that is hyperbolic or time-consistent, there exists a research investment constraint that limits the information acquisition. However, even if the information is free, while a time-consistent agent always acquires information, a hyperbolic agent may prefer staying ignorant. We also emphasize that hyperbolic discounting preferences induce and information precision constraint that leads the hyperbolic innovator to ignore the information whilethe time-consistent innovator gets it. Moreover, the possibility that the agent has a commitment power in the future strengthens this ignorance strategy. Finally, we investigate the impact of existing liability rules on the innovator's decision to acquire information.Innovation, information acquisition, uncertainty, self-control, time inconsistency, liability rules

Innovation and information acquisition under time inconsistency and uncertainty

This paper analyzes the impact of hyperbolic discounting preferences on theagent's information acquisition decision who wants to undertake a potentialdangerous activity for human health or the environment. We find that belowcertain discount rate threshold, an agent prefers ignoring information andcontinuing his project. On the other hand, above this threshold, it is optimal forhim to acquire information, and the investment for acquiring the information isincreasing with the discount rate. We then conclude that hyperbolic discountingpreferences limit the information acquisition. Moreover, we explain that the lackof self-control induced by hyperbolic discounting preferences also restraints theinformation acquisition. Finally, we analyze the efficiency of the strict liabilityrule and the negligence rule to motivate the agent to acquire information.Innovation, information acquisition, uncertainty, self-control, time inconsistency,liability rules

Manufacturing Doubt

In their persistent fight to affect regulation, firms have developed specific strategies to exploit scientific uncertainty. They have spent large amounts of money to generate and publicize favorable scientific findings, to discredit and downplay unfavorable ones and to shape the public’s perceptions through large-scale communication campaigns. We develop a new model to study the interplay between scientific uncertainty, firms’ communication and public policies. The government is benevolent but populist and maximizes social welfare as perceived by citizens. The industry can provide costly evidence that its activity is not harmful. Citizens incorrectly treat the industry’s information on par with scientific knowledge. We characterize the industry’s optimal communication policy. As scientists become increasingly convinced that the industrial activity is harmful, firms first devote more and more resources to reassure people. When scientists’ beliefs reach a critical threshold, however, the industry stops its efforts abruptly. We then study the impact of firms’ communication on scientific funding. A populist government may, perversely, want to support research to better allow firms to miscommunicate. Populist policies can entail significant welfare losses. Establishing an independent funding agency always reduces these losses and may lead to under- or over- investment in research with respect to the first-best

L'information influence-elle le comportement de réduction d'énergie des ménages ?

International audienceDespite several financial aids intended to promote the energy transition, the French people continue to buy energy-intensive products and are not interested in improving the energy performance of their homes. We propose a new measure which consists of provision of information to change individual behaviour. Currently, health and the environment are the prime concerns and we propose to encourage individuals to reduce their energy consumption by informing them of the environmental and health consequences linked to energy consumption. To test the validity of our proposal, we use the willingness to pay for more energy efficient equipment and thermal insulation. We conducted an online survey which included messages on the link between environment-energy and health-energy. We showed that it affected households' energy behaviour. We compared this strategy with policies already in place. We found that policies that combined provision of information with a subsidy, increase sales of goods that reduce energy consumption and was the best option from a social welfare perspective.Malgré plusieurs aides financières destinées à favoriser la transition énergétique, les Français continuent d'acheter des produits énergivores et ne sont pas intéressés par l'amélioration de la performance énergétique de leur logement. Nous proposons une nouvelle mesure qui consiste à fournir des informations pour changer le comportement individuel. Actuellement, la santé et l'environnement sont au cœur des préoccupations et nous proposons d'inciter les particuliers à réduire leur consommation d'énergie en les informant des conséquences environnementales et sanitaires liées à la consommation d'énergie. Pour tester la validité de notre proposition, nous utilisons le consentement à payer pour des équipements plus économes en énergie et une isolation thermique. Nous avons mené une enquête en ligne qui comprenait des messages sur le lien entre environnement-énergie et santé-énergie. Nous avons montré qu'elle affectait le comportement énergétique des ménages. Nous avons comparé cette stratégie avec les politiques déjà en place. Nous avons constaté que les politiques qui combinent information et subvention, augmentent les ventes de biens qui réduisent la consommation d'énergie et constituent la meilleure option du point de vue du bien-être social

Are consumers concerned about plastic water bottles environmental impact?

International audienceAlthough plastic induces environmental damages, almost all water bottles are made from plastic. However, these damages are more or less significant according to the plastic used. This study evaluates the consumers' willingness to pay (WTP) for different plastics used for water packaging. Successive messages emphasizing the characteristics of plastic are delivered to participants allowing explaining information influence on the consumers' WTP. We find that information has a significant effect on WTP. The participants' WTP for plastic bottles tends to increase after information emphasizing that the related plastic bottles has no negative impact on the environment, and to decrease with information on its negative impact. Using a fixed effect panel model, we show that there is a significant premium for recycled plastic bottles except when biodegradable plastic bottles are present on the market. We compare the welfare effects of regulatory policies allowing reducing environmental damages of plastic water bottles. We find that information campaign on plastic bottles issues is the best policy. But it is difficult to implement it in practice. Then we discuss about other environmental policies and tools which could be applied in order to reduce plastic water bottles negative impact on the environment