Mistrust and Opposition to Large-Scale Projects: An Experiment on the Role of Uncertainty

Riccardo Ghidoni

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Abstract

The realization of large-scale projects such as landfills, power plants, etc. is
often hindered by the opposition of the possible host community. I study the case
in which the opposition emerges from the mistrust of the host community toward
the proposer of the project due to an informational asymmetry on the project's
returns. In a novel laboratory experiment, I compare a baseline opposition game to
treatments including the possibility to endogenously disclose information about the
project or to offer compensatory transfers to the host. Both tools are more effective
than expected in mitigating oppositions, but have heterogeneous impacts on the
creation of social surplus and its allocation among the stakeholders.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages41
Volume2017-053
Publication statusPublished - 18 Dec 2017

Publication series

NameCentER Discussion Paper
Volume2017-053

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Keywords

  • trust
  • NIMBY
  • Information disclosure
  • Compensatory transfers

Cite this

Ghidoni, R. (2017). Mistrust and Opposition to Large-Scale Projects: An Experiment on the Role of Uncertainty. (CentER Discussion Paper; Vol. 2017-053). Tilburg: CentER, Center for Economic Research.