Experimental Treatments

To test the hypotheses, we conducted an artefactual field experiment. Participants were randomly matched in groups of three farmers. We consider producers heterogeneity in terms of available land size. In addition, we account for differences in the opportunity costs they face to conserve rubber agroforestry by varying the relative profit from rub-ber agroforestry. Two participants in each group received five experimental units of land (LL=5), whereas one participant received ten (LH =10). We assume that low-endowed participants would face higher opportunity costs of conservation, considering the survival constraints that poor users may face when making conservation efforts that involve real sacrifices (Baland and Platteau, 1999). Therefore, low-endowed partici-pants (aL=0.3) faced a lower relative profit from rubber agroforestry than those with

larger allotments (aH=0.4)(aL<aH). To capture the preferences associated with the alter-native production systems, the endowment allocation decision was framed as a cultiva-tion decision between oil palm and rubber agroforestry. When the cultivacultiva-tion systems were introduced to the participants, we explained once, irrespective of the treatment, that rubber agroforestry generates a number of ecosystem services, such as water, soil fertility and biodiversity, which would translate into higher payments for all group members. ¹¹ To exemplify this, we presented posters with photos of each cultivation sys-tem. To account for positive externalities generated from conservation, each land unit allocated by a group member to rubber agroforestry, increased the earnings of all group members by b=0.2.

Participants made five sequential decisions to capture preferences in the baseline deci-sion, where no incentive was provided, and to test how changes in monetary incentives interact with social and nature motives. To investigate the extent to which pro-social and pro-nature preferences are affected by the framing effect in a hypothetical setting, we first introduced two hypothetical decisions. In the first scenario or decision, which served as a baseline, participants decided how to allocate their endowment given only hypothetical monetary pay-offs for cultivating oil palm and rubber. In the second hypothetical decision, the treatments were introduced. In order to avoid potential in-come and learning effects between decisions, participants did not receive feedback on their own earnings or group contributions. After the hypothetical decisions, the en-dowment status was again randomly assigned, indicating that the number of available land units might differ between the hypothetical and the incentivized decisions. Then, three incentivized decisions were played. While, in the first incentivized decision, par-ticipants allocated their endowment given only the oil palm and rubber agroforestry profits and the externality, in the following two decisions they encountered the treat-ment. We tested two treatments, applying a between-subject design:

 Non-Framed: The relative profit generated from rubber agroforestry was intro-duced .

“We would like to increase the relative profit generated from rubber agroforestry cultiva-tion”

11 Instructions are available upon request.

 Framed treatment: The monetary incentive for practicing rubber agroforestry was explicitly framed as PES intended to foster pro-environmental behavior. It was presented as follows:

“We would like to introduce Payments for Environmental Services (PES)-like a bonus for the practice of rubber agroforestry (you do not receive this bonus for the cultivation of oil palm). As we mentioned before, rubber agroforestry compared to oil palm has a positive impact on the environment: soil is healthier, more water is available and the number of birds and mammals increases. Therefore, we would like to foster pro-environmental be-havior by paying extra amount of earning for rubber agroforestry.”

Since we were interested in testing the effect of different levels of monetary incentive without creating a high cognitive load on participants we considered two payment sets of monetary incentive by applying a between-subject design. We also applied a within-subject design, varying the payment levels of the monetary incentive. Thus, a participant faced different payment levels in the second and third incentivized decisions. The amount of the hypothetical incentive in the second hypothetical decision lay between the payment levels provided in the incentivized decisions and did not differ between participants. To account for order effects, we switched the order in which low and high payments were offered. Thus, half of the participants received a high payment in the second decision and a low payment in the third decision, whereas the other half re-ceived a low payment in the second decision and a high payment in the third. Table 3 presents the relative profit of rubber agroforestry by payment set. Given the parame-ters, a self-interested utility maximizer would fully specialize in oil palm, irrespective of the payment level.

Table 3: Relative profit of rubber agroforestry (a+δ) by payment set.

Payment Set 1 Payment Set 2 Hypothetical decision (NI)

No Payment (NI) a A

Payment (NI) a+.2 a+.2

Incentivized decision (I)

No Payment (I) a A

Low Payment (I) a+.05 a+.1

High Payment (I) a+.25 a+.3

Decisions were made anonymously and, throughout the session, information on group membership or earnings were not provided to participants. Participants were not al-lowed to communicate with each other during the experiment. This was intended to minimize the threat of social sanctions and the consideration of pro-social motives with regard to group members.