Cooperation, the Crowding Out Effect and the Role Of Incentives in the Case of Sustainable Hydroplant Project in Brazil

Abstract

Research Question: This paper sought to present a proposal for the analysis of the cooperation between a hydroelectric power plant and the fisheries community. Motivation: The use of economic experiments on the sustainability theme has been employed by adapting public goods games to the different realities faced by the players. For this research, focused on the environmental preservation, preferring to contribute/not to contribute to their preservation consists of public goods dilemmas. This subject also constitutes a research opportunity, since in the preliminary literature review few studies addressed concomitantly the sustainability question related to hydroelectric plants and the cooperation between them and a group of local stakeholders. Idea: The core idea of this paper was to bring a proposal of association between the behavioural economics and crowding out theory to the analysis of actions envisaging sustainability, which demand the cooperation between a hydroelectric power plant and the fisheries community that make a living out of its reservoir. Data: The research was conducted assessing documents such as Itaipu´s annual sustainability reports and other documents between the plant and its stakeholders, in the environmental area, and in the form of contracts and cooperation agreements. Next, eight personal interviews were conducted with managers involved in the Sustainability Programme. Tools: With these information, the suggested public goods game was adapted from Fehr and Gachter (2000), and Sefton, Shupp and Walker (2007), and – for the present proposal of experiment – was named ‘reservoir game’, as the public goods in this case is Itaipu´s plant reservoir. Findings: This study can help in the acquisition of relevant information about the applicability and efficiency of punishment and reward mechanisms related to cooperation, either in support of future negotiations and agreements or in bargaining situations when groups present their demands. One can only hope to have also contributed to the improvement of management of contractual agreements between corporations and local stakeholders in projects targeting sustainability, to reduce any transaction costs, and minimize the possibilities for conflict and disagreement between partners. Contribution: This paper expands existing research related to cooperation between a power plant and its local stakeholders.

Author Biographies

Fabricio Baron Mussi, Pontifícia Universidade Católica do Paraná, Brazil

Bachelor's and Master at Business at Federal University of Parana and PhD student at Business of Pontifícia Universidade Católica do Paraná. He is currently contract’s manager at Itaipu Hydroelectric Power Plant. He has experience in Business, acting mainly in the following subjects: sustainability; economic behavior; finances.

Ubirata Tortato, Pontifícia Universidade Católica do Paraná

Bachelor's and Master at Business from Universidade Federal do Paraná and PhD at Production Engineering from Universidade de São Paulo. He is currently full professor at The Pontifícia Universidade Católica do Paraná and Chief-Editor of REBRAE. He has experience in Business, acting mainly in the following subjects: sustainability, SSCM, eco-efficiency, cooperatives and sustainable Universities.

Published
2018-09-05
How to Cite
Mussi, F., & Tortato, U. (2018). Cooperation, the Crowding Out Effect and the Role Of Incentives in the Case of Sustainable Hydroplant Project in Brazil. Management:Journal Of Sustainable Business And Management Solutions In Emerging Economies, 23(2), 71-84. doi:10.7595/management.fon.2018.0011
Section
Articles