Incentives and prosocial behavior
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Publication Details
Output type: Journal article
Author list: Benabou R, Tirole J
Publisher: American Economic Association
Publication year: 2006
Journal: American Economic Review (0002-8282)
Volume number: 96
Issue number: 5
Start page: 1652
End page: 1678
Number of pages: 27
ISSN: 0002-8282
eISSN: 1944-7981
Languages: English-Great Britain (EN-GB)
Unpaywall Data
Open access status: green
Full text URL: http://papers.nber.org/papers/w11535.pdf
Abstract
We develop a theory of prosocial behavior that combines heterogeneity in individual altruism and greed with concerns for social reputation or self-respect. Rewards or punishments (whether material or image-related) create doubt about the true motive for which good deeds are performed, and this "overjustification effect" can induce a partial or even net crowding out of prosocial behavior by extrinsic incentives. We also identify the settings that are conducive to multiple social norms and, more generally, those that make individual actions complements or substitutes, which we show depends on whether stigma or honor is (endogenously) the dominant reputational concern. Finally, we analyze the socially optimal level of incentives and how monopolistic or competitive sponsors depart from it. Sponsor competition is shown to potentially reduce social welfare.
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