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

Author

Listed:
  • 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.

Suggested Citation

  • Maarten C.W. Janssen & Ewa Mendys, 2001. "The Price of a Price: On the Crowding out of Social Norms," Tinbergen Institute Discussion Papers 01-065/1, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20010065
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    References listed on IDEAS

    as
    1. 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.
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    3. Bester, Helmut & Guth, Werner, 1998. "Is altruism evolutionarily stable?," Journal of Economic Behavior & Organization, Elsevier, vol. 34(2), pages 193-209, February.
    4. Mark Casson (ed.), 1997. "Culture, Social Norms and Economics," Books, Edward Elgar Publishing, volume 0, number 1337.
    5. Dufwenberg, Martin & Lundholm, Michael, 2001. "Social Norms and Moral Hazard," Economic Journal, Royal Economic Society, vol. 111(473), pages 506-525, July.
    6. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 749-775.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    social norms; intrinsic and extrinsic motivation; network effects; health policy;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • D10 - Microeconomics - - Household Behavior - - - General
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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