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

  • Nicola Lacetera
  • Mario Macis
  • Robert Slonim

We present evidence from nearly 14,000 American Red Cross blood drives and from a natural field experiment showing that economic incentives have a positive effect on blood donations without increasing the fraction of donors who are ineligible to donate. The effect increases with the incentive's economic value. However, a substantial proportion of the increase in donations is explained by donors leaving neighboring drives without incentives to attend drives with incentives; this displacement also increases with the economic value of the incentive. We conclude that extrinsic incentives stimulate prosocial behavior, but unless displacement effects are considered, the effect may be overestimated. (JEL D64, H41, I12)

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Article provided by American Economic Association in its journal American Economic Journal: Economic Policy.

Volume (Year): 4 (2012)
Issue (Month): 1 (February)
Pages: 186-223

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Handle: RePEc:aea:aejpol:v:4:y:2012:i:1:p:186-223
Note: DOI: 10.1257/pol.4.1.186
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  1. Carl Mellström & Magnus Johannesson, 2008. "Crowding Out in Blood Donation: Was Titmuss Right?," Journal of the European Economic Association, MIT Press, vol. 6(4), pages 845-863, 06.
  2. John A. List, 2011. "The Market for Charitable Giving," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 157-80, Spring.
  3. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-58, December.
  4. 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.
  5. Lacetera, Nicola & Macis, Mario, 2010. "Do all material incentives for pro-social activities backfire? The response to cash and non-cash incentives for blood donations," Journal of Economic Psychology, Elsevier, vol. 31(4), pages 738-748, August.
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