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An interplay between intrinsic and extrinsic motivations on voluntary contributions to a public good in a large economy

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  • Makoto Kakinaka
  • Koji Kotani

    ()

Abstract

This paper develops a theoretical model of voluntary contributions to a public good in a large economy where the impact of each individual's contribution on the total provision is negligible, and people's preference consists of extrinsic and intrinsic payoffs. Of particular interest is moral motivation that is assumed to be formulated internally and independently of other people in the intrinsic payoff. Adopting an equilibrium concept, we discuss public provision that could affect moral motivation. With this approach, we demonstrate that a wide variety of crowd-out/in hypotheses can occur within a single framework, once the interplay between extrinsic and intrinsic payoffs is introduced. The model provides the conditions under which public provision induces crowd-out as well as crowd-in. It is shown that the effect of public provision highly depends on the degree of motivational shift originating from the intrinsic payoff as well as the characteristics of the public good in relation to the private good in the extrinsic payoff.

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File URL: http://hdl.handle.net/10.1007/s11127-010-9602-0
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Bibliographic Info

Article provided by Springer in its journal Public Choice.

Volume (Year): 147 (2011)
Issue (Month): 1 (April)
Pages: 29-41

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Handle: RePEc:kap:pubcho:v:147:y:2011:i:1:p:29-41

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Web page: http://www.springerlink.com/link.asp?id=100332

Related research

Keywords: Voluntary contribution; Intrinsic and extrinsic motivations; Large economy;

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References

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  14. Lindbeck, Assar, 1997. "Incentives and Social Norms in Household Behavior," Seminar Papers 622, Stockholm University, Institute for International Economic Studies.
  15. Andreoni, James, 1990. "Impure Altruism and Donations to Public Goods: A Theory of Warm-Glow Giving?," Economic Journal, Royal Economic Society, vol. 100(401), pages 464-77, June.
  16. Mari Rege, 2004. "Social Norms and Private Provision of Public Goods," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(1), pages 65-77, 02.
  17. Warr, Peter G., 1982. "Pareto optimal redistribution and private charity," Journal of Public Economics, Elsevier, vol. 19(1), pages 131-138, October.
  18. Frey, Bruno S. & Meier, Stephan, 2004. "Pro-social behavior in a natural setting," Journal of Economic Behavior & Organization, Elsevier, vol. 54(1), pages 65-88, May.
  19. Brunner, Eric J, 1998. " Free Riders or Easy Riders?: An Examination of the Voluntary Provision of Public Radio," Public Choice, Springer, vol. 97(4), pages 587-604, December.
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