Externalities and Coordination Failures

• Peer Effects in Electric Car Adoption: Evidence from SwedenI study peer effects in the diffusion of electric cars in Sweden. To identify peer effects, I use a shift-share IV design that links the renewal of elapsing individual-level, car leasing contracts (i.e., shift) with the propensity to acquire an electric car based on individual traits (i.e., share). I study three different peer groups: co-workers, family members, and neighbors. One new electric car causes, in the next quarter, an additional .077 new electric car acquisitions in the workplace, .014 in the family, and .111 in the neighborhood. These peer effects generate persistent shifts in the demand for electric cars rather than pulling forward future planned purchases. I show that the new electric cars obtained by peers largely crowd out diesel and petrol cars and that peer effects are associated with the transmission of information. Peer effects reduce carbon emissions by encouraging peers to acquire electric and cleaner cars, drive less, and lower the number of cars. Finally, I document how the empirical findings alter the design of optimal environmental policies.Optimal Congestion Zone Pricing, Driving Behavior, and Vehicle ChoiceUrban driving causes local congestion and emission externalities, motivating numerous cities to establish location-based road pricing policies. This article provides a theoretical and empirical framework for optimal congestion charges that explicitly targets local emission and congestion externalities. As an application, I implement the optimal congestion formula by estimating the effect of the congestion zone on car ownership and driving behavior in Stockholm. To identify these effects, I exploit a temporary exemption of alternative fuel cars and variation in individuals' exposure to tolls on the road section between home and work using Swedish administrative microdata. I document that individuals exposed to congestion charges on their way to work are .84 percentage points more likely to acquire an alternative fuel car but 1.1 percentage points less likely to adopt a fossil fuel car. Adopting an alternative fuel car corresponds to a substitution from fossil fuel cars as the size of the fleet remains stable. The congestion charge resulted in an annual increase of 157 vehicle kilometers traveled by commuters in alternative fuel cars and a decrease of 298 kilometers in fossil fuel cars, suggesting that commuters partly substituted to alternative modes of transport. The empirical estimates imply an optimal congestion charge, on average, of €.38 per entrance, with diminished driving in the congestion zone accounting for three-quarters of the total charge.Do We All Coordinate in the Long Run?Players often fail to coordinate on the efficient equilibrium in laboratory weak-link coordination games. In this paper, we investigate whether such coordination failures can be mitigated by increasing the number of rounds or altering per-period stakes. We find that neither time horizon nor stakes affect equilibrium selection. In contrast to previous findings, players are not more likely to play above the previous period’s minimum choice when the horizon is longer or per-period stakes are lower. We also investigate which socio-demographic factors and behavioral traits correlate most strongly with play both in the first round and in subsequent rounds. Cognitive ability as measured by a cognitive reflection test stands out as the characteristic that is most strongly associated with efficient coordination.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Behavioral Economics

Environmental Economics

Technology Adoption

Transportation

Government Pricing & Policy

Experimental Economics

Economics

nationalekonomi

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