Recent attempts at explaining the energy-efficiency gap rely on considerations re-lated to organizational and behavioral/cognitive failures. In this paper, we build on the strategicdelegation literature to advance a complementary explanation. It is shown that strategic marketinteraction may encourage business owners to instill a bias against energy efficiency in manage-rial compensation contracts. Since managers respond to financial incentives, their decisions willreflect this bias, resulting in lack of investment.
A new rationale for not picking low hanging fruits: The separation of ownership and control
7 October 2020