Economic Incentives and Social Preferences: Substitutes or Complements? (Part 1)

2013 ◽  
pp. 24-48
Author(s):  
S. Bowles ◽  
S. Polanía-Reyes
Keyword(s):  
Social Behavior ◽  
Public Goods ◽  
Social Preferences ◽  
Economic Incentives ◽  
The Public ◽  
Ethical Norms ◽  
Pro Social Behavior

Explicit economic incentives designed to increase contributions to public goods and to promote other pro-social behavior sometimes are counterproductive or less effective than would be predicted among entirely self-interested individuals. This may occur when incentives adversely affect individuals’ altruism, ethical norms, intrinsic motives to serve the public, and other social preferences. The opposite also occurs—crowding in — though it appears less commonly.

scholarly journals Economic Incentives and Social Preferences: Substitutes or Complements?

2012 ◽  
Vol 50 (2) ◽  
pp. 368-425 ◽  
Author(s):  
Samuel Bowles ◽  
Sandra Polanía-Reyes
Keyword(s):  
Nash Equilibria ◽  
Social Preferences ◽  
Economic Incentives ◽  
Crowding Out ◽  
Decision Situation ◽  
Appropriate Behavior ◽  
The Public ◽  
Crowding Effects ◽  
Ethical Norms ◽  
Pro Social Behavior

Explicit economic incentives designed to increase contributions to public goods and to promote other pro-social behavior sometimes are counterproductive or less effective than would be predicted among entirely self-interested individuals. This may occur when incentives adversely affect individuals' altruism, ethical norms, intrinsic motives to serve the public, and other social preferences. The opposite also occurs—crowding in —though it appears less commonly. In the fifty experiments that we survey, these effects are common, so that incentives and social preferences may be either substitutes (crowding out) or complements (crowding in). We provide evidence for four mechanisms that may account for these incentive effects on preferences: namely that incentives may (i) provide information about the person who implemented the incentive, (ii) frame the decision situation so as to suggest appropriate behavior, (iii) compromise a control averse individual's sense of autonomy, and (iv) affect the process by which people learn new preferences. An implication is that the evaluation of public policy must be restricted to allocations that are supportable as Nash equilibria when account is taken of these crowding effects. We show that well designed fines, subsidies, and the like minimize crowding out and may even do the opposite, making incentives and social preferences complements rather than substitutes. (JEL D02, D03, D04, D83, E61, H41, Z13)

scholarly journals Public cooperation statements

2021 ◽  
Author(s):  
Ann-Kathrin Koessler ◽  
Lionel Page ◽  
Uwe Dulleck
Keyword(s):  
Social Behavior ◽  
Public Good ◽  
Behavioral Change ◽  
Institutional Context ◽  
Controlled Environment ◽  
The Public ◽  
Interaction Partners ◽  
Good Setting ◽  
Pro Social Behavior ◽  
Voluntary Cooperation

AbstractCommunication is a well-known tool to promote cooperation and pro-social behavior. In this study, we examine whether minimal communication in form of public consent with a pre-defined cooperation statement is sufficient to strengthen cooperation in groups. Within the controlled environment of a laboratory experiment, we identify ways by which non-enforceable cooperation statements are associated with higher levels of cooperation in a public good setting. At first, the statement triggers selection; socially oriented individuals are more likely to make the cooperation statement. In addition, we can show that a behavioral change takes place once the statement is made. This change can be attributed to commitment arising from the pledge and to increased coordination between the interaction partners. Depending on the institutional context, these drivers can vary in strength. Comparing compulsory and voluntary cooperation statements, we find that both are effective in motivating higher contributions to the public good.

Heterogeneous Effects of Informational Nudges on Pro-social Behavior

2015 ◽  
Vol 15 (4) ◽  
pp. 1619-1655 ◽  
Author(s):  
Jiayi Bao ◽  
Benjamin Ho
Keyword(s):  
Behavioral Interventions ◽  
Social Preferences ◽  
Experimental Studies ◽  
Economic Incentives ◽  
Economic Behavior ◽  
Moral Licensing ◽  
Heterogeneous Effects ◽  
Impure Altruism ◽  
Effective Policy ◽  
Pro Social Behavior

Abstract Numerous experimental studies of informational nudges both in the lab and the field have demonstrated not just that informational nudges are effective policy tools for influencing behavior, but also that nudges have heterogeneous impacts that differ depending on the characteristics of the person involved and the situation. We adapt Andreoni’s theory of warm-glow impure altruism to account for how altruism motives respond differently depending on the disposition of the person and the situation. The model explains both positive spillovers (moral cleansing) and negative spillovers (moral licensing) for behavioral interventions, showing that targeting of informational campaigns depends on the complementarity between people’s traits and the intervention’s content. More importantly, the design of economic incentives (like Pigouvian taxes) to shift economic behavior should depend on both the distribution of social preferences in the population and the use of behavioral interventions.

Economic Instruments for Biodiversity and Ecosystem Service Conservation & the EU State Aid Regulation

2013 ◽  
Vol 10 (1) ◽  
pp. 6-28 ◽  
Author(s):  
Elina Raitanen ◽  
Elina Raitanen ◽  
Jukka Similä ◽  
Elina Raitanen ◽  
Jukka Similä ◽  
...  
Keyword(s):  
European Union ◽  
Public Goods ◽  
Economic Incentives ◽  
State Aid ◽  
The European Union ◽  
Economic Instruments ◽  
The Public ◽  
Land Owners ◽  
Nation States ◽  
Competition Rules

Many environmental services are not traded in markets but are rather public goods and their supply cannot easily be motivated by the market forces. This leads to underinvestment in the public goods relative to what would be socially desirable. Financial instruments are designed to modify behaviour by encouraging private individuals, organisations and businesses to participate actively in conservation. Nation states are ultimately responsible for providing public goods but the competition rules of the European Union restrict the use of economic instruments that constitute ‘state aid’ as defined in the Treaty on the Functioning of the European Union (TFEU). This article will analyse the regulatory frames under which economic incentives may constitute state aid in the meaning of 107 TFEU and the terms and conditions on which these aids may still be granted for land-owners.

scholarly journals Will There Be Blood? Incentives and Displacement Effects in Pro-Social Behavior

2012 ◽  
Vol 4 (1) ◽  
pp. 186-223 ◽  
Author(s):  
Nicola Lacetera ◽  
Mario Macis ◽  
Robert Slonim
Keyword(s):  
Social Behavior ◽  
Economic Value ◽  
Economic Incentives ◽  
Red Cross ◽  
American Red Cross ◽  
Present Evidence ◽  
Natural Field Experiment ◽  
Pro Social Behavior ◽  
Positive Effect ◽  
Displacement Effects

We present evidence from nearly 14,000 American Red Cross blood drives and from a natural field experiment showing that economic incentives have a positive effect on blood donations without increasing the fraction of donors who are ineligible to donate. The effect increases with the incentive's economic value. However, a substantial proportion of the increase in donations is explained by donors leaving neighboring drives without incentives to attend drives with incentives; this displacement also increases with the economic value of the incentive. We conclude that extrinsic incentives stimulate pro-social behavior, but unless displacement effects are considered, the effect may be overestimated. (JEL D64, H41, I12)

scholarly journals Crime-related Exposure to Violence and Social Preferences: Experimental Evidence from Bogotá

2020 ◽  
Author(s):  
Francesco Bogliacino ◽  
Camilo Ernesto Gómez ◽  
Gianluca Grimalda
Keyword(s):  
Social Behavior ◽  
Experimental Evidence ◽  
Social Preferences ◽  
Exposure To Violence ◽  
Psychological Trauma ◽  
Economic Shocks ◽  
Economic Shock ◽  
Victims Of Violence ◽  
Pro Social Behavior ◽  
Significant Support

We study the effects of psychological trauma and negative economic shocks on pro-social behavior in victims of violence in Colombia’s capital. Trauma positively affects pro-sociality in a first experiment, with a (randomly administered) recall of fearful situations having differential effects on people highly or lowly exposed to violence. This effect replicates in a second experiment, where both trauma and economic shock are found to induce pro-social behavior. Participants significantly favor same-district residents in the first experiment but not in the second. We fail to find significant support for various mechanisms posited to mediate the effect of trauma on pro-sociality.

Role of anthropomorphization on pro-social behavior

2018 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Archit Vinod Tapar ◽  
Abhishek Mishra ◽  
Ashish Sadh ◽  
Aditya Billore
Keyword(s):  
Social Behavior ◽  
Content Type ◽  
The Public ◽  
Compliance Behavior ◽  
Self Construal ◽  
Intrinsic Motivations ◽  
Need For Affect ◽  
Pro Social Behavior ◽  
Social Causes

PurposeThis paper aims to examine the effect of anthropomorphic entities in the public service advertisements (PSA) on individuals’ pro-social behavior. In addition, the role of individuals’ need for affect and self-construal in moderating the effect of anthropomorphism toward pro-social behavior is explored.Design/methodology/approachAn experimental research design is executed to identify the causal relationship between anthropomorphic representations in the advertisements and pro-social behavior.FindingsThe findings suggest that anthropomorphism in PSA is helpful in increasing compliance behavior amongst individuals. Besides, an individual’s need for affect was found to positively moderate pro-social behavior.Research/limitations implicationsThe authors extend the existing literature on the usage of anthropomorphism in social causes. The authors also explore the role of one of the intrinsic motivations, need for affect, in pro-social behavior.Social implicationsThe study demonstrates how best one could use anthropomorphization in PSA by sensitizing individuals to social causes and compliance behavior.Originality/valueThe study builds upon the existing research on anthropomorphization, need for affect and pro-social behavior in increasing compliance with PSA.

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