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Will There Be Blood? Incentives and Substitution Effects in Pro-social Behavior

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Author Info

  • Lacetera, Nicola

    ()
    (University of Toronto)

  • Macis, Mario

    ()
    (Johns Hopkins University)

  • Slonim, Robert

    ()
    (University of Sydney)

Abstract

We examine how economic incentives affect pro-social behavior through the analysis of a unique dataset with information on more than 14,000 American Red Cross blood drives. Our findings are consistent with blood donors responding to incentives in a "standard" way; offering donors economic incentives significantly increases turnout and blood units collected, and more so the greater the incentive's monetary value. In addition, there is no disproportionate increase in donors who come to a drive but are ineligible to donate when incentives are offered. Further evidence from a small-scale field experiment corroborates these findings and confirms that donors are motivated by the economic value of the items offered. We also find that a substantial fraction of the increase in donations due to incentives may be explained by donors substituting away from neighboring drives toward drives where rewards are offered, and the likelihood of this substitution is higher the higher the monetary value of the incentive offered and if neighboring drives do not offer incentives. Thus, extrinsic incentives motivate pro-social behavior, but unless substitution effects are also considered, the effect of incentives may be overestimated.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4567.

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Length: 39 pages
Date of creation: Nov 2009
Date of revision:
Publication status: published in: American Economic Journal: Economic Policy, 2012, 4 (1), 186-223 as "Will There be Blood? Incentives and Displacement Effects in Pro-Social Behavior"
Handle: RePEc:iza:izadps:dp4567

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Related research

Keywords: altruism; pro-social behavior; public good provision; incentives; public health;

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References

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  1. Lacetera, Nicola & Macis, Mario, 2010. "Social image concerns and prosocial behavior: Field evidence from a nonlinear incentive scheme," Journal of Economic Behavior & Organization, Elsevier, vol. 76(2), pages 225-237, November.
  2. Polborn Mattias K, 2008. "Competing for Recognition through Public Good Provision," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 8(1), pages 1-25, September.
  3. Lacetera, Nicola & Macis, Mario, 2008. "Motivating Altruism: A Field Study," IZA Discussion Papers 3770, Institute for the Study of Labor (IZA).
  4. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough Or Don'T Pay At All," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 791-810, August.
  5. Dan Ariely & Anat Bracha & Stephan Meier, 2007. "Doing good or doing well? Image motivation and monetary incentives in behaving prosocially," Working Papers 07-9, Federal Reserve Bank of Boston.
  6. Lorenz Goette & Alois Stutzer, 2008. "Blood donations and incentives: evidence from a field experiment," Working Papers 08-3, Federal Reserve Bank of Boston.
  7. Gary S. Becker & Julio Jorge El�as, 2007. "Introducing Incentives in the Market for Live and Cadaveric Organ Donations," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 3-24, Summer.
  8. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-55, September.
  9. John List, 2008. "Informed consent in social science," Artefactual Field Experiments 00086, The Field Experiments Website.
  10. Alvin E. Roth, 2007. "Repugnance as a Constraint on Markets," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 37-58, Summer.
  11. Rick Harbaugh & Theodore To, 2005. "False Modesty: When Disclosing Good News Looks Bad," Working Papers 2005-05, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  12. Garbarino, Ellen & Slonim, Robert, 2009. "The robustness of trust and reciprocity across a heterogeneous U.S. population," Journal of Economic Behavior & Organization, Elsevier, vol. 69(3), pages 226-240, March.
  13. Mellström, Carl & Johannesson, Magnus, 2005. "Crowding Out in Blood Donation: Was Titmuss Right?," Working Papers in Economics 180, University of Gothenburg, Department of Economics, revised 08 Feb 2008.
  14. Stephan Meier, 2006. "A survey of economic theories and field evidence on pro-social behavior," Working Papers 06-6, Federal Reserve Bank of Boston.
  15. repec:feb:artefa:0106 is not listed on IDEAS
  16. Harbaugh, William T, 1998. "The Prestige Motive for Making Charitable Transfers," American Economic Review, American Economic Association, vol. 88(2), pages 277-82, May.
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Citations

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Cited by:
  1. Judd B. Kessler & Alvin E. Roth, 2012. "Organ Allocation Policy and the Decision to Donate," American Economic Review, American Economic Association, vol. 102(5), pages 2018-47, August.
  2. Lan Shi, 2011. "Monetary Rewards, Image Concern, and Intrinsic Motivation: Evidence from a Survey on Blood Donation," Working Papers UWEC-2010-07-R, University of Washington, Department of Economics, revised Feb 2011.

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