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Can short-term incentives induce long-lasting cooperation? Results from a public-goods experiment

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  • Bruttel, Lisa
  • Friehe, Tim

Abstract

This paper investigates whether providing strong cooperation incentives only at the outset of a group interaction spills over to later periods to ensure cooperation in the long run. We study a repeated linear public-good game with punishment opportunities and a parameter change after the first ten (of twenty) rounds. Our data shows that cooperation among subjects who had experienced a higher marginal return on public-good contributions or low punishment costs in rounds 1–10 rapidly deteriorated in rounds 11–20 once these incentives were removed, eventually trending below the level of cooperation in the control group. This suggests the possibility of temporary incentives backfiring in the long run. This paper ties in with the literature highlighting the potentially adverse effects of the use of incentives.

Suggested Citation

  • Bruttel, Lisa & Friehe, Tim, 2014. "Can short-term incentives induce long-lasting cooperation? Results from a public-goods experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 53(C), pages 120-130.
    • Handle: RePEc:eee:soceco:v:53:y:2014:i:c:p:120-130
    DOI: 10.1016/j.socec.2014.09.001
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    Cited by:

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    2. Marco Fabbri & Paolo Nicola Barbieri & Maria Bigoni, 2019. "Ride Your Luck! A Field Experiment on Lottery-Based Incentives for Compliance," Management Science, INFORMS, vol. 65(9), pages 4336-4348, September.
    3. Maho Nakagawa & Mathieu Lefebvre & Anne Stenger, 2022. "Long-lasting effects of incentives and social preference: A public goods experiment," Post-Print hal-03777681, HAL.
    4. Parilina, Elena M. & Zaccour, Georges, 2022. "Payment schemes for sustaining cooperation in dynamic games," Journal of Economic Dynamics and Control, Elsevier, vol. 139(C).
    5. Kamm, Aaron & Koch, Christian & Nikiforakis, Nikos, 2021. "The ghost of institutions past: History as an obstacle to fighting tax evasion?," European Economic Review, Elsevier, vol. 132(C).
    6. Mathieu Lefebvre & Anne Stenger, 2016. "Long-lasting effects of temporary incentives in public good games," Working Papers of BETA 2016-25, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

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    More about this item

    Keywords

    Public-good game; Team; Punishment; Incentives; Experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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