The Timing of (Green) Incentives: Exploiting Opportunity Windows

Abstract

Incentives have been extensively studied in the management and policy literature, with most attention focusing on their type, magnitude, alignment, and effects. More recently, scholars paid attention to discounting issues and how these issues impact the effectiveness of incentives. Building on the nascent literature related to incentive timing, we argue that timing can offer an additional dimension to better characterize incentives and leverage their power by exploiting windows of opportunity. Using conceptual reasoning, we identify several mechanisms by which the timing of incentives can be used to increase their behavioral power. Specifically, well-timed (green) incentives can harness temporal landmarks, intermittence, immediacy and surprise effects, and intrinsic motivation reinforcement to reach environmental goals without significantly increasing the overall costs. We also indicate new avenues for further research such as designing a timing menu or considering time itself as an incentive.