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Social approval, competition and cooperation

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  • Xiaofei Pan

    () (University of the South)

  • Daniel Houser

    (George Mason University)

Abstract

Abstract Non-monetary rewards are frequently used to promote pro-social behaviors, and these behaviors often result in approval from one’s peers. Nevertheless, we know little about how peer-approval, and particularly competition for peer-approval, influences people’s decisions to cooperate. This paper provides experimental evidence suggesting that people in peer-approval competitions value social approval more when it leads to unique and durable rewards. Our evidence suggests that such rewards act as a signaling mechanism, thereby contributing to the value of approval. We show that this signaling mechanism generates cooperation at least as effectively as cash rewards. Our findings point to the potential value of developing new mechanisms that rely on small non-monetary rewards to promote generosity in groups.

Suggested Citation

  • Xiaofei Pan & Daniel Houser, 2017. "Social approval, competition and cooperation," Experimental Economics, Springer;Economic Science Association, vol. 20(2), pages 309-332, June.
  • Handle: RePEc:kap:expeco:v:20:y:2017:i:2:d:10.1007_s10683-016-9485-0
    DOI: 10.1007/s10683-016-9485-0
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    More about this item

    Keywords

    Peer approval; Competition; Cooperation;

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • H4 - Public Economics - - Publicly Provided Goods

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