Working Paper: NBER ID: w11535
Authors: Roland Bénabou; Jean Tirole
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 settings that are conducive to multiple social norms and those where disclosing one's generosity may backfire. Finally, we analyze the choice by public and private sponsors of incentive levels, their degree of confidentiality and the publicity given to agents' behavior. Sponsor competition is shown to potentially reduce social welfare.
Keywords: Incentives; Prosocial Behavior; Social Norms; Reputation; Altruism
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 incentives (M52) | intrinsic motivation (O31) |
| extrinsic incentives (M52) | prosocial contributions (D64) |
| overjustification effect (M52) | intrinsic motivation (O31) |
| rewards (M52) | reputational value of good deeds (D64) |
| prominence of contributions (B31) | signaling motive for prosocial behavior (D64) |
| prominence of contributions (B31) | skepticism about motivations (D91) |
| sponsor competition (Z23) | inefficiencies in the provision of incentives (D61) |
| excessive rewards (M52) | misalignment with social welfare (I39) |