Working Paper: CEPR ID: DP4633
Authors: Roland B. Nabou; Jean Tirole
Abstract: We build a theory of prosocial behaviour that combines heterogeneity in individual altruism and greed with concerns for social reputation or self-respect. The presence of rewards or punishments creates doubt as to the true motive for which good deeds are performed, and this ?overjustification effect? can result in a net crowding out of prosocial behaviour by extrinsic incentives. The model also allows us to identify settings that are conducive to multiple social norms of behaviour, and those where disclosing one?s generosity may backfire. Finally, we analyse the equilibrium contracts offered by sponsors, including the level and confidentiality or publicity of incentives. Sponsor competition may cause rewards to bid down rather than up, and can even reduce social welfare by requiring agents to engage in inefficient sacrifices.
Keywords: altruism; crowding out; identity; motivation; overjustification effect; reputation; rewards; social norms
JEL Codes: D64; D82; H41; Z13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| extrinsic rewards (M52) | intrinsic motivation (O31) |
| extrinsic rewards (M52) | prosocial behavior (D64) |
| intrinsic motivation (O31) | prosocial behavior (D64) |
| visibility of prosocial actions (C92) | participation in prosocial activities (D64) |
| reputational concerns (M14) | prosocial behavior (D64) |