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Working for the “warm glow”: On the benefits and limits of prosocial incentives

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  • Imas, Alex

Abstract

We study whether using prosocial incentives, where effort is tied directly to charitable contributions, may lead to better performance than standard incentive schemes. In a real-effort task, individuals indeed work harder for charity than for themselves, but only when incentive stakes are low. When stakes are raised, effort increases when individuals work for themselves but not when they work for others and, as a result, the difference in provided effort disappears. Individuals correctly anticipate these effects, choosing to work for charity at low incentives and for themselves at high incentives. The results are consistent with warm glow giving and have implications for optimal incentive design.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:pubeco:v:114:y:2014:i:c:p:14-18 DOI: 10.1016/j.jpubeco.2013.11.006
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    References listed on IDEAS

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    Cited by:

    1. Gosnell, Greer & Metcalfe, Robert & List, John A, 2016. "A new approach to an age-old problem: solving externalities by incenting workers directly," LSE Research Online Documents on Economics 84331, London School of Economics and Political Science, LSE Library.
    2. repec:bla:ecinqu:v:55:y:2017:i:1:p:397-408 is not listed on IDEAS
    3. van Rijn, Jordan & Barham, Bradford & Sundaram-Stukel, Reka, 2016. "An Experimental Approach to Comparing Similarity- and Guilt-Based Charitable Appeals," Staff Paper Series 584, University of Wisconsin, Agricultural and Applied Economics.
    4. repec:eee:jeborg:v:136:y:2017:i:c:p:45-62 is not listed on IDEAS
    5. Uri Gneezy & John List & Jeffrey Livingston & Xiangdong Qin & Sally Sadoff & Yang Xu, 2017. "Measuring success in education: the role of effort on the test itself," Framed Field Experiments 00614, The Field Experiments Website.
    6. repec:eee:soceco:v:68:y:2017:i:c:p:25-40 is not listed on IDEAS
    7. Adriaan R. Soetevent & Te Bao & Anouk L. Schippers, 2016. "A Commercial Gift for Charity," Tinbergen Institute Discussion Papers 16-009/VII, Tinbergen Institute.
    8. Anya Samek, 2015. "Gender Differences in Job Entry Decisions: A University-Wide Field Experiment," Natural Field Experiments 00419, The Field Experiments Website.
    9. Nadine Chlaß & Lata Gangadharan & Kristy Jones, 2015. "Charitable Giving and Intermediation," Monash Economics Working Papers 18-15, Monash University, Department of Economics.
    10. Ek, Claes, 2015. "Some Causes are More Equal than Others? Behavioral Spillovers in Charitable Giving," Working Papers 2015:29, Lund University, Department of Economics.
    11. Stefano DellaVigna & Devin Pope, 2016. "What Motivates Effort? Evidence and Expert Forecasts," NBER Working Papers 22193, National Bureau of Economic Research, Inc.
    12. Charness, Gary & Cobo-Reyes, Ramón & Sánchez, Ángela, 2016. "The effect of charitable giving on workers’ performance: Experimental evidence," Journal of Economic Behavior & Organization, Elsevier, pages 61-74.
    13. Felipe Augusto de Araujo & Erin Carbone & Lynn Conell-Price & Marli W. Dunietz & Ania Jaroszewicz & Rachel Landsman & Diego Lamé & Lise Vesterlund & Stephanie Wang & Alistair J. Wilson, 2015. "The Effect of Incentives on Real Effort: Evidence from the Slider Task," CESifo Working Paper Series 5372, CESifo Group Munich.
    14. Adriaan R. Soetevent & Te Bao & Anouk L. Schippers, 2016. "A Commercial Gift for Charity," Tinbergen Institute Discussion Papers 16-009/VII, Tinbergen Institute.
    15. Kajackaite, Agne & Werner, Peter, 2015. "The incentive effects of performance requirements – A real effort experiment," Journal of Economic Psychology, Elsevier, vol. 49(C), pages 84-94.
    16. Jingping Li & Yohanes E. Riyanto, 2017. "Category Reporting In Charitable Giving: An Experimental Analysis," Economic Inquiry, Western Economic Association International, vol. 55(1), pages 397-408, January.
    17. Alex Imas & Sally Sadoff & Anya Samek, 2015. "Do People Anticipate Loss Aversion?," CESifo Working Paper Series 5277, CESifo Group Munich.
    18. Mirco Tonin & Michael Vlassopoulos, 2015. "Corporate Philanthropy and Productivity: Evidence from an Online Real Effort Experiment," Management Science, INFORMS, pages 1795-1811.
    19. repec:eee:jeborg:v:142:y:2017:i:c:p:482-493 is not listed on IDEAS
    20. Christine L. Exley & Stephen J. Terry, 2015. "Wage Elasticities in Working and Volunteering: The Role of Reference Points in a Laboratory Study," Harvard Business School Working Papers 16-062, Harvard Business School, revised Jun 2017.
    21. Canh Thien Dang & Trudy Owens, 2017. "What motivates Ugandan NGOs to diversify: Risk reduction or private gain?," Discussion Papers 2017-11, University of Nottingham, CREDIT.
    22. Mirco Tonin & Michael Vlassopoulos, 2015. "Corporate Philanthropy and Productivity: Evidence from an Online Real Effort Experiment," Management Science, INFORMS, pages 1795-1811.

    More about this item

    Keywords

    Prosocial behavior; Warm glow; Incentives; Motivation;

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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