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Social Incentives Matter: Evidence from an Online Real Effort Experiment

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  • Mirco Tonin
  • Michael Vlassopoulos

Abstract

Contributing to a social cause can be an important driver for workers in the public and non-profit sector as well as in firms that engage in Corporate Social Responsibility activities. This paper compares the effectiveness of social incentives to financial incentives using an online real effort experiment. We find that social incentives lead to a 20% rise in productivity, regardless of their form (lump sum or related to performance) or strength. When subjects can choose the mix of incentives half sacrifice some of their private compensation to increase social compensation, with women more likely than men. Furthermore, social incentives do not attract less productive subjects, nor subjects that respond more to exogenously imposed social incentives. Our calculations suggest that a dollar spent on social incentives is equivalent to increasing private compensation by at least half a dollar.

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Bibliographic Info

Paper provided by Department of Economics, Central European University in its series CEU Working Papers with number 2012_12.

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Date of creation: 20 Jul 2012
Date of revision: 20 Jul 2012
Handle: RePEc:ceu:econwp:2012_12

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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Social and Monetary Incentives
    by Nicholas Gruen in Club Troppo on 2012-07-31 13:41:27
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Cited by:
  1. Carpenter, Jeffrey P. & Gong, Erick, 2013. "Motivating Agents: How Much Does the Mission Matter?," IZA Discussion Papers 7602, Institute for the Study of Labor (IZA).
  2. Imas, Alex, 2014. "Working for the “warm glow”: On the benefits and limits of prosocial incentives," Journal of Public Economics, Elsevier, vol. 114(C), pages 14-18.
  3. Mirco Tonin & Michael Vlassopoulos, 2013. "Sharing One's Fortune? An Experimental Study on Earned Income and Giving," CESifo Working Paper Series 4475, CESifo Group Munich.
  4. Fehrler, Sebastian & Kosfeld, Michael, 2014. "Pro-social missions and worker motivation: An experimental study," Journal of Economic Behavior & Organization, Elsevier, vol. 100(C), pages 99-110.
  5. David Reinstein, 2014. "The Economics of the Gift," Economics Discussion Papers 749, University of Essex, Department of Economics.
  6. Timothy Besley & Maitreesh Ghatak, 2013. "Profit with Purpose? A Theory of Social Enterprise with Experimental Evidence," STICERD - Economic Organisation and Public Policy Discussion Papers Series 47, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.

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