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The Price of a Price: On the Crowding out of Social Norms

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  • Maarten C.W. Janssen

    ()
    (Erasmus University Rotterdam)

  • Ewa Mendys

    ()
    (Erasmus University Rotterdam)

Abstract

There is increasing empirical and experimental evidence thatproviding financial incentives to agents to performcertain socially desirable actions may permanently reduce other typesof motivations to undertake these actions.We study the impact of financial incentives on the desire for socialapproval, using the example of blood donation.We show that in a society with altruists and egoists, who all careabout social approval, introducing a payment intoa voluntary system may actually decrease the amount of blood donated.Withdrawing the financial incentive doesnot restore the norm to donate and may reduce the supply of bloodeven further.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 01-065/1.

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Date of creation: 09 Jul 2001
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Handle: RePEc:dgr:uvatin:20010065

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Web page: http://www.tinbergen.nl

Related research

Keywords: social norms; intrinsic and extrinsic motivation; network effects; health policy;

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  1. Bester, Helmut & Guth, Werner, 1998. "Is altruism evolutionarily stable?," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 193-209, February.
  2. Gneezy, Uri & Rustichini, Aldo, 2000. "A Fine is a Price," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 1-17, January.
  3. Bar-Gill, O. & Fershtman, C., 2001. "The Limit of Public Policy: Endogenous Preferences," Papers 2001-5, Tel Aviv.
  4. Cullis, John G. & Lewis, Alan, 1997. "Why people pay taxes: From a conventional economic model to a model of social convention," Journal of Economic Psychology, Elsevier, vol. 18(2-3), pages 305-321, April.
  5. Lindbeck, Assar & Nyberg, Sten & Weibull, Jörgen W., 1997. "Social Norms and Economic Incentives in the Welfare State," Working Paper Series 476, Research Institute of Industrial Economics.
  6. Stewart, Hamish, 1992. "Rationality and the market for human blood," Journal of Economic Behavior & Organization, Elsevier, vol. 19(2), pages 125-143, October.
  7. Akerlof, George A, 1980. "A Theory of Social Custom, of Which Unemployment May be One Consequence," The Quarterly Journal of Economics, MIT Press, vol. 94(4), pages 749-75, June.
  8. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
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Cited by:
  1. Bénabou, Roland & Tirole, Jean, 2004. "Incentives and Prosocial Behaviour," CEPR Discussion Papers 4633, C.E.P.R. Discussion Papers.

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