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

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Author Info
Maarten C.W. Janssen () (Erasmus University Rotterdam)
Ewa Mendys () (Erasmus University Rotterdam)
Abstract

There is increasing empirical and experimental evidence that providing financial incentives to agents to perform certain socially desirable actions may permanently reduce other types of motivations to undertake these actions. We study the impact of financial incentives on the desire for social approval, using the example of blood donation. We show that in a society with altruists and egoists, who all care about social approval, introducing a payment into a voluntary system may actually decrease the amount of blood donated. Withdrawing the financial incentive does not restore the norm to donate and may reduce the supply of blood even further.

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

Find related papers by JEL classification:
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
D10 - Microeconomics - - Household Behavior - - - General
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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  1. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November. [Downloadable!] (restricted)
  2. Stewart, Hamish, 1992. "Rationality and the market for human blood," Journal of Economic Behavior & Organization, Elsevier, vol. 19(2), pages 125-143, October. [Downloadable!] (restricted)
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  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. [Downloadable!] (restricted)
  5. Gneezy, Uri & Rustichini, Aldo, 2000. "A Fine is a Price," Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 1-17, January.
  6. Assar Lindbeck & Sten Nyberg & Jšrgen W. Weibull, 1999. "Social Norms And Economic Incentives In The Welfare State," The Quarterly Journal of Economics, MIT Press, vol. 114(1), pages 1-35, February. [Downloadable!] (restricted)
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  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. [Downloadable!] (restricted)
    Other versions:
  8. Bester, Helmut & Guth, Werner, 1998. "Is altruism evolutionarily stable?," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 193-209, February. [Downloadable!] (restricted)
    Other versions:
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