Effects of carbon reduction labels: Evidence from scanner data

We investigate the effects of carbon reduction labels using a detailed scanner data set. Using a difference-in-differences estimation strategy, we find that having a carbon label has no impact on detergent prices or demand. We also investigate possible heterogeneous effects of carbon labels using the synthetic control method. We find no evidence to indicate that the prices for the counterfactual detergents without the label would have been any different from the prices of the carbon-labeled detergents. We investigate the reasons for these results and conclude that the specific design of the carbon label is responsible for its lack of success

The Groucho Effect of Uncertain Standards

Consumers are rarely sure of the exact standard that product labels and other certificates of quality represent. We show that any such uncertainty creates a “Groucho effect” in which seeing that a product has a label leads consumers to infer that the standard for the label itself is not very demanding. Label adoption is therefore always less likely to be an equilibrium than without uncertainty over the standard, and if it is an equilibrium it is always less informative than without such uncertainty. The Groucho effect leads to an information externality so better firms are reluctant to adopt labels if worse firms adopt them. Applying the model to eco-labels, we find that industry groups, governments, and NGOs can increase label adoption by publicizing labeling criteria, by encouraging consumers to expect label adoption when there are multiple equilibria, and by setting high standards that are less likely to be devalued by low quality firms.Eco-labels, disclosure, certification, persuasion, standards

Agreeing on efficient emissions reduction

We propose a simple mechanism providing incentives to reduce harmful emissions to their efficient level without infracting upon productive efficiency. The mechanism employs a contest creating incentives among participating nations to simultaneously exert efficient productive and efficient abatement efforts. Participation in the most stylised form of the scheme is voluntary and individually rational; all rules are mutually agreeable and are unanimously adopted if proposed. The scheme balances its budget and requires no principal. In a perhaps more realistic stochastic output version which could potentially inform policy decisions, we show that the transfers required by the efficient mechanism create a mutual insurance motive which may serve as effective rationale for the (gradual) formation of International Environmental Agreements

Exploring the Online Micro-targeting Practices of Small, Medium, and Large Businesses

Facebook and other advertising platforms exploit users data for marketing purposes by allowing advertisers to select specific users and target them (the practice is being called micro-targeting). However, advertisers such as Cambridge Analytica have maliciously used these targeting features to manipulate users in the context of elections. The European Commission plans to restrict or ban some targeting functionalities in the new European Democracy Action Plan act to protect users from such harms. The difficulty is that we do not know the economic impact of these restrictions on regular advertisers. In this paper, to inform the debate, we take a first step by understanding who is advertising on Facebook and how they use the targeting functionalities. For this, we asked 890 U.S. users to install a monitoring tool on their browsers to collect the ads they receive on Facebook and information about how these ads were targeted. By matching advertisers on Facebook with their LinkedIn profiles, we could see that 71% of advertisers are small and medium-sized businesses with 200 employees or less, and they are responsible for 61% of ads and 57% of ad impressions. Regarding micro-targeting, we found that only 32% of small and medium-sized businesses and 30% of large-sized businesses micro-target at least one of their ads. These results should not be interpreted as micro-targeting not being useful as a marketing strategy, but rather that advertisers prefer to outsource the micro-targeting task to ad platforms. Indeed, Facebook is employing optimization algorithms that exploit user data to decide which users should see what ads; which means ad platforms are performing an algorithmic-driven micro-targeting. Hence, when setting restrictions, legislators should take into account both the traditional advertiser-driven micro-targeting as well as algorithmic-driven micro-targeting performed by ad platforms

Efficient emissions reduction

We propose a simple mechanism capable of achieving international agreement on the reduction of harmful emissions to their efficient level. It employs a contest creating incentives among participating nations to simultaneously exert efficient productive and efficient abatement efforts. Participation in the most stylised formulation of the scheme is voluntary and individually rational. All rules are mutually agreeable and are unanimously adopted if proposed. The scheme balances its budget and requires no principal. The mechanism provides a benchmark result for the cost of the implementation of these desirable properties. In a more realistic setup which could potentially inform policy decisions, we discuss participation enforcement through punishment clauses, exclusive trade agreements and environmental standards and show that they are effectively discouraging free-riding

Exploring the Online Micro-targeting Practices of Small, Medium, and Large Businesses

International audienceFacebook and other advertising platforms exploit users' data for marketing purposes by allowing advertisers to select specific users and target them with well-crafted messages (the practice is being called micro-targeting). However, advertisers such as Cambridge Analytica have maliciously used these targeting features to manipulate users in the context of elections. The European Commission plans to restrict or even ban some targeting functionalities in the new European Democracy Action Plan act to protect users from such harms. The difficulty in finding appropriate restrictions is that we do not know the economic impact of these restrictions on regular advertisers. In this paper, to inform the debate, we take a first step by understanding who is advertising on Facebook and how they use the targeting functionalities of ad platforms. For this, we asked 890 U.S. users to install a monitoring tool on their browsers to collect the ads they receive on Facebook and information about how these ads were targeted. By matching advertisers on Facebook with their LinkedIn profiles, we could see that 71% of advertisers are small and medium-sized businesses with 200 employees or less, and they are responsible for 61% of ads and 57% of ad impressions. Regarding micro-targeting, we found that only 32% of small and medium-sized businesses and 30% of large-sized businesses in our dataset micro-target at least one of their ads. These results should not be interpreted as micro-targeting not being useful as a marketing strategy, but rather that advertisers prefer to outsource the micro-targeting task to ad platforms. Indeed, to deliver ads, Facebook is employing optimization algorithms that exploit user data to decide which users should see what ads; which basically means ad platforms are performing an algorithmic-driven micro-targeting. Hence, when setting restrictions on micro-targeting, legislators should take into account both the traditional advertiser-driven micro-targeting as well as algorithmic-driven micro-targeting performed by ad platforms

Label Confusion: The Groucho Effect of Uncertain Standards

Labels certify that a product meets some standard for quality, but often consumers are unsure of the exact standard that the label represents. Focusing on the case of ecolabels for environmental quality, we show how even small amounts of uncertainty can create consumer confusion that reduces or eliminates the value to firms of adopting voluntary labels. First, consumers are most suspicious of a label when a product with a bad reputation has it, so labels are often unpersuasive at showing that a seemingly bad product is actually good. Second, label proliferation aggravates the effect of uncertainty, causing the informativeness of labels to decrease rather than increase. Third, uncertainty makes labeling and nonlabeling equilibria more likely to coexist as the number of labels increases, so consumers face greater strategic uncertainty over how to interpret the presence or absence of a label. Finally, a label can be legitimitized or spoiled for other products when a product with a good or bad reputation displays it, so firms may adopt labels strategically to manipulate such information spillovers, which further exacerbates label confusion. Managers can reduce label confusion by supporting mandatory labeling or by undertaking investments to make certain labels "focal." This paper was accepted by Pradeep Chintagunta and Preyas Desai, special issue editors. This paper was accepted by Pradeep Chintagunta and Preyas Desai, special issue editors.marketing, communications, information theory, environment

Demand response in the workplace: A field experiment

International audienceTo increase the share of intermittent renewable energy in our production mix, occupants of buildings can be called upon to lower, anticipate or postpone their consumption according to the network balance. This article presents a small-scale field experiment aimed at introducing demand response in the workplace. We test the impact of load-shedding signals assorted with incentives on the energy consumption of workers in the tertiary sector. Two incentive schemes are tested, namely, an honorary contest and a monetary tournament. The results show a reduction in workers power demand during the load-shedding periods when the incentives are based on the honorary contest. In contrast, the monetary tournament where workers can win money according to their behavior seems to have no impact. The results also suggest that few workers can be responsible for a large part of energy consumption while the building is partially automatically controlled

Impact of land use on wind erosion and dust emission in the Sahel: a regional modelling approach

International audienceThe semi-arid Sahelian region is particularly prone to wind erosion due to low and variable precipitation rates producing low vegetation cover with a high interannual variability. Surfaces traditionally devoted to pasture are progressively turned to cultivated fields increasing the proportion of bare surface unprotected from wind erosion. Wind erosion could significantly evolve in the future due to climate change and to the increase in crop areas due to the growing population. To estimate the wind erosion and dust emission in the Sahel, we have developed a regional modelling approach in the frame of the CAVIARS project (Climate, Agriculture and Vegetation: Impacts on Aeolian eRosion in the Sahel). The approach is based on existing models that were adapted, improved and coupled to represent the main processes involved in the wind erosion and their dependence to climate parameters and agricultural practices. Natural vegetation (herbaceous) and cultivated vegetation (millet) are respectively modelled with the STEP vegetation model (Mougin et al., 1995) and the SARRA-H agronomic model (Baron et al., 2005). Both models have been improved to reproduce the dynamics of dry vegetation and to produce multi-annual simulations (e.g. Pierre et al., 2016). The wind erosion model (Marticorena and Bergametti, 1995) has been tested and adapted to represent the erosion fluxes over typical Sahelian vegetated surfaces (Pierre et al., 2014a, b). Surface crusting and its dynamics is represented as a function of soil texture, precipitation and vegetation cover. A main limitation was to represent the very high surface winds associated to the convective activity that are not reproduced by the large scale meteorological wind fields (Largeron et al., 2015). A specific parameterization of the distribution of the surface wind speeds have been developed based on high resolution simulations (CASCADE exercise). The application of the models at the regional scale required dedicated data sets, established for this purpose. Daily precipitation fields have been produced based on local measurements and grazing pressure maps have been established based on national data and/or agro-poastoral census. The proportion of cultivated fields and pastured lands are derived from the Sahelian land use map of the AGRHYMET (Tappan et al., 2004). The spatial and temporal distribution of the simulated dust emissions computed from the period 2000-2014 will be presented. The parameterization of the wind speed distribution associated with the convective activity allows to better capture the seasonal pattern of local wind erosion (Bergametti et al., 2017). The relative weight of climatic parameters, vegetation and cultivation will be estimated by comparing regional simulations with and without vegetation and cultivation. Reference

Wind erosion and dust emission in the Sahel: a regional modelling approach to evaluate the impact of climate and land-use

International audienceThe semi-arid Sahelian region is particularly prone to wind erosion due to low and variable annual precipitation producing low vegetation cover with a high interannual variability. Surfaces traditionally devoted to livestock grazing are used as croplands, increasing the proportion of bare surface unprotected from wind erosion. Wind erosion could significantly evolve in the future with climate change and the changes in land use and agropastoral management practices expected from the persistent demographic growth. To estimate the wind erosion and dust emission in the Sahel, we have developed a regional modelling approach in the framework of the CAVIARS ANR project (Climate, Agriculture and Vegetation: Impacts on Aeolian eRosion in the Sahel). The approach is based on existing models that were adapted and coupled to represent the main processes involved in the wind erosion and their dependence to climate parameters and agropastoral practices. Natural vegetation (herbaceous) and cropped vegetation (millet) are respectively modelled with the STEP vegetation model and the SARRA-H agronomic model,both models improved to reproduce the dynamics of dry vegetation. The wind erosion model has been tested and adapted to represent the erosion fluxes over typical Sahelian vegetated surfaces. A specific parameterization have been developed to represent the very strong surface winds associated to the convective activity. Grazing pressure maps were established based on national data and/or agro-pastoral census. The spatial and temporal distribution of the simulated dust emissions computed for the period 2000-2014 will be presented. The parameterization of the wind speed distribution associated with the convective activity allows to better capture the seasonal pattern of local wind erosion. The relative weight of climatic parameters and agropastoral management will be estimated by reference to a simulation with no vegetation and no land use