Working Paper: CEPR ID: DP16400
Authors: Kevin Bauer; Michael Kosfeld; Ferdinand von Siemens
Abstract: We study, theoretically and empirically, the effects of incentives on the self-selection and coordination of motivated agents to produce a social good. Agents join teams where they allocate effort to either generate individual monetary rewards (selfish effort) or contribute to the production of a social good with positive effort complementarities (social effort). Agents differ in their motivation to exert social effort. Our model predicts that lowering incentives for selfish effort in one team increases social good production by selectively attracting and coordinating motivated agents. We test this prediction in a lab experiment allowing us to cleanly separate the selection effect from other effects of low incentives. Results show that social good production more than doubles in the low- incentive team, but only if self-selection is possible. Our analysis highlights the important role of incentives in the matching of motivated agents engaged in social good production.
Keywords: incentives; intrinsic motivation; self-selection; public service
JEL Codes: C91; D90; J24; J31; M52
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Lowering incentives for selfish effort (H31) | Increased social good production (O35) |
| Self-selection is possible (C52) | Increased social good production (O35) |
| Motivated agents are drawn to low-incentive team (D82) | Coordination on high-effort equilibrium (C72) |
| Low incentives (H31) | Attract motivated individuals and deter unmotivated ones (J68) |
| Motivated individuals coordination (M54) | Increased social good production (O35) |