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Social Incentives Matter: Evidence from an Online Real Effort Experiment

Author

Listed:
  • Tonin, Mirco

    (Free University of Bozen/Bolzano)

  • Vlassopoulos, Michael

    (University of Southampton)

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.

Suggested Citation

  • Tonin, Mirco & Vlassopoulos, Michael, 2012. "Social Incentives Matter: Evidence from an Online Real Effort Experiment," IZA Discussion Papers 6716, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp6716
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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 18:41:27

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    Cited by:

    1. 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.
    2. Besley, Timothy & Ghatak, Maitreesh, 2013. "Profit with purpose? a theory of social enterprise with experimental evidence," LSE Research Online Documents on Economics 58181, London School of Economics and Political Science, LSE Library.
    3. Tonin, Mirco & Vlassopoulos, Michael, 2017. "Sharing one’s fortune? An experimental study on earned income and giving," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 66(C), pages 112-118.
    4. repec:cep:stieop:47 is not listed on IDEAS
    5. Hannes Koppel & Tobias Regner, 2014. "Corporate Social Responsibility in the work place," Experimental Economics, Springer;Economic Science Association, vol. 17(3), pages 347-370, September.
    6. Nancy R. Baldiga & Katherine B. Coffman, 2018. "Laboratory Evidence on the Effects of Sponsorship on the Competitive Preferences of Men and Women," Management Science, INFORMS, vol. 64(2), pages 888-901, February.
    7. Jeffrey Carpenter & Erick Gong, 2016. "Motivating Agents: How Much Does the Mission Matter?," Journal of Labor Economics, University of Chicago Press, vol. 34(1), pages 211-236.
    8. 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.
    9. repec:esx:essedp:749 is not listed on IDEAS
    10. Reinstein, David, 2014. "The Economics of the Gift," Economics Discussion Papers 10009, University of Essex, Department of Economics.
    11. Robin Zoutenbier, 2014. "The Impact of Matching Mission Preferences on Well-being at Work," Tinbergen Institute Discussion Papers 14-036/I, Tinbergen Institute.
    12. Robin Zoutenbier, 2016. "The impact of matching mission preferences on well-being at work," Economics of Governance, Springer, vol. 17(3), pages 295-315, August.

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    More about this item

    Keywords

    social incentives; private incentives; real effort experiment; corporate social responsibility; gender; prosocial behavior; sorting;
    All these keywords.

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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