IDEAS home Printed from https://ideas.repec.org/a/nos/voprec/2013-05-4.html
   My bibliography  Save this article

Economic Incentives and Social Preferences: Substitutes or Complements?

Author

Listed:
  • S. Bowles
  • S. Polania-Reyes.

Abstract

Part 2 In the second part of the paper concrete forms and examples of the effects of incentives on the social preferences are shown and experiments are described where these effects occur. The authors claim that the negative consequences of the incentives are connected less to the incentives themselves as, rather, with their perceptions among the agents. That is why for a reasonable use of incentives one has to take account of possible effects of such perceptions.

Suggested Citation

  • S. Bowles & S. Polania-Reyes., 2013. "Economic Incentives and Social Preferences: Substitutes or Complements?," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 5.
    • Handle: RePEc:nos:voprec:2013-05-4
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    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.
    2. Jian Li & Erte Xiao & Daniel Houser & P. Read Montague, 2009. "Neural Responses to Sanction Threats in Two-Party Economic Exchange," Working Papers 1012, George Mason University, Interdisciplinary Center for Economic Science.
    3. Jeffrey Carpenter & Erika Seki, 2011. "Do Social Preferences Increase Productivity? Field Experimental Evidence From Fishermen In Toyama Bay," Economic Inquiry, Western Economic Association International, vol. 49(2), pages 612-630, April.
    4. Astrid Hopfensitz & Ernesto Reuben, 2009. "The Importance of Emotions for the Effectiveness of Social Punishment," Economic Journal, Royal Economic Society, vol. 119(540), pages 1534-1559, October.
    5. Fehr, Ernst & Leibbrandt, Andreas, 2011. "A field study on cooperativeness and impatience in the Tragedy of the Commons," Journal of Public Economics, Elsevier, vol. 95(9-10), pages 1144-1155, October.
    6. Sung-Ha Hwang & Samuel Bowles, 2011. "A note on optimal incentives with state-dependent preferences," Working Papers 1118, Research Institute for Market Economy, Sogang University.
    7. Simon Gachter & Ernst Fehr, 2000. "Cooperation and Punishment in Public Goods Experiments," American Economic Review, American Economic Association, vol. 90(4), pages 980-994, September.
    8. David Masclet & Charles Noussair & Steven Tucker & Marie-Claire Villeval, 2003. "Monetary and Nonmonetary Punishment in the Voluntary Contributions Mechanism," American Economic Review, American Economic Association, vol. 93(1), pages 366-380, March.
    9. Bowles, Samuel & Hwang, Sung-Ha, 2008. "Social preferences and public economics: Mechanism design when social preferences depend on incentives," Journal of Public Economics, Elsevier, vol. 92(8-9), pages 1811-1820, August.
    10. Ernst Fehr & Simon Gachter & Georg Kirchsteiger, 1997. "Reciprocity as a Contract Enforcement Device: Experimental Evidence," Econometrica, Econometric Society, vol. 65(4), pages 833-860, July.
    11. Galbiati, Roberto & Vertova, Pietro, 2008. "Obligations and cooperative behaviour in public good games," Games and Economic Behavior, Elsevier, vol. 64(1), pages 146-170, September.
    12. 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, June.
    13. Dean S. Karlan, 2005. "Using Experimental Economics to Measure Social Capital and Predict Financial Decisions," American Economic Review, American Economic Association, vol. 95(5), pages 1688-1699, December.
    14. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social Preferences and the Response to Incentives: Evidence from Personnel Data," The Quarterly Journal of Economics, Oxford University Press, vol. 120(3), pages 917-962.
    15. Stephen Leider & Markus M. Möbius & Tanya Rosenblat & Quoc-Anh Do, 2009. "Directed Altruism and Enforced Reciprocity in Social Networks," The Quarterly Journal of Economics, Oxford University Press, vol. 124(4), pages 1815-1851.
    16. Fehr, Ernst & Leibbrandt, Andreas, 2008. "Cooperativeness and Impatience in the Tragedy of the Commons," IZA Discussion Papers 3625, Institute for the Study of Labor (IZA).
    17. Maria Claudia Lopez & James J. Murphy & John M. Spraggon & John K. Stranlund, 2012. "Comparing The Effectiveness Of Regulation And Pro‐Social Emotions To Enhance Cooperation: Experimental Evidence From Fishing Communities In Colombia," Economic Inquiry, Western Economic Association International, vol. 50(1), pages 131-142, January.
    18. Dan Ariely & Anat Bracha & Stephan Meier, 2009. "Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially," American Economic Review, American Economic Association, vol. 99(1), pages 544-555, March.
    19. David K. Levine, 1998. "Modeling Altruism and Spitefulness in Experiment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(3), pages 593-622, July.
    20. Carpenter, Jeffrey & Myers, Caitlin Knowles, 2010. "Why volunteer? Evidence on the role of altruism, image, and incentives," Journal of Public Economics, Elsevier, vol. 94(11-12), pages 911-920, December.
    21. Besley, Timothy J. & Bevan, Gwyn & Burchardi, Konrad B., 2009. "Naming & Shaming: The impacts of different regimes on hospital waiting times in England and Wales," CEPR Discussion Papers 7306, C.E.P.R. Discussion Papers.
    22. Bohnet, Iris & Herrmann, Benedikt & Al-Ississ, Mohamad & Robbett, Andrea & Khalid, Al-Yahia & Zeckhauser, Richard Jay, 2010. "The Elasticity of Trust: How to Promote Trust in the Arab Middle East and the United States," Scholarly Articles 4449094, Harvard Kennedy School of Government.
    23. Irlenbusch, Bernd & Ruchala, Gabriele K., 2008. "Relative rewards within team-based compensation," Labour Economics, Elsevier, vol. 15(2), pages 141-167, April.
    24. Xiao, Erte & Houser, Daniel, 2011. "Punish in public," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 1006-1017, August.
    25. Charles Bellemare & Sabine Kröger & Arthur van Soest, 2008. "Measuring Inequity Aversion in a Heterogeneous Population Using Experimental Decisions and Subjective Probabilities," Econometrica, Econometric Society, vol. 76(4), pages 815-839, July.
    26. John A. List, 2004. "Young, Selfish and Male: Field evidence of social preferences," Economic Journal, Royal Economic Society, vol. 114(492), pages 121-149, January.
    27. Ertan, Arhan & Page, Talbot & Putterman, Louis, 2009. "Who to punish? Individual decisions and majority rule in mitigating the free rider problem," European Economic Review, Elsevier, vol. 53(5), pages 495-511, July.
    28. Matthias Sutter & Stefan Haigner & Martin G. Kocher, 2010. "Choosing the Carrot or the Stick? Endogenous Institutional Choice in Social Dilemma Situations," Review of Economic Studies, Oxford University Press, vol. 77(4), pages 1540-1566.
    29. Jean-Robert Tyran & Lars P. Feld, 2006. "Achieving Compliance when Legal Sanctions are Non-deterrent," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 135-156, March.
    30. Rodriguez-Sickert, Carlos & Guzmán, Ricardo Andrés & Cárdenas, Juan Camilo, 2008. "Institutions influence preferences: Evidence from a common pool resource experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 215-227, July.
    31. Schotter, Andrew & Weiss, Avi & Zapater, Inigo, 1996. "Fairness and survival in ultimatum and dictatorship games," Journal of Economic Behavior & Organization, Elsevier, vol. 31(1), pages 37-56, October.
    32. Karlan, Dean S., 2005. "Using Experimental Economics to Measure Social Capital and Predict Financial Decisions," Center Discussion Papers 28429, Yale University, Economic Growth Center.
    33. Francesco Drago & Roberto Galbiati & Pietro Vertova, 2009. "The Deterrent Effects of Prison: Evidence from a Natural Experiment," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 257-280, April.
    34. Stanca, Luca & Bruni, Luigino & Corazzini, Luca, 2009. "Testing theories of reciprocity: Do motivations matter?," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 233-245, August.
    35. Ernst Fehr & Lorenz Goette, 2007. "Do Workers Work More if Wages Are High? Evidence from a Randomized Field Experiment," American Economic Review, American Economic Association, vol. 97(1), pages 298-317, March.
    36. Jeffrey Carpenter & Cristina Connolly & Caitlin Myers, 2008. "Altruistic behavior in a representative dictator experiment," Experimental Economics, Springer;Economic Science Association, vol. 11(3), pages 282-298, September.
    37. Becker, Gary S, 1976. "Altruism, Egoism, and Genetic Fitness: Economics and Sociobiology," Journal of Economic Literature, American Economic Association, vol. 14(3), pages 817-826, September.
    38. Ellingsen, Tore & Johannesson, Magnus & Mollerstrom, Johanna & Munkhammar, Sara, 2012. "Social framing effects: Preferences or beliefs?," Games and Economic Behavior, Elsevier, vol. 76(1), pages 117-130.
    39. Matteo Cervellati & Joan-Maria Esteban & Laurence Kranich, 2010. "Work Values, Endogenous Sentiments and Redistribution," Working Papers 434, Barcelona Graduate School of Economics.
    40. Matthias Benz & Stephan Meier, 2008. "Do people behave in experiments as in the field?—evidence from donations," Experimental Economics, Springer;Economic Science Association, vol. 11(3), pages 268-281, September.
    41. Samuel Bowles & Sung-Ha Hwang, 2014. "Optimal Incentives with State-Dependent Preferences," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(5), pages 681-705, October.
    42. Ernst Fehr & John A. List, 2004. "The Hidden Costs and Returns of Incentives-Trust and Trustworthiness Among CEOs," Journal of the European Economic Association, MIT Press, vol. 2(5), pages 743-771, September.
    43. repec:pri:rpdevs:gamespaper.pdf is not listed on IDEAS
    44. George Loewenstein, 2000. "Emotions in Economic Theory and Economic Behavior," American Economic Review, American Economic Association, vol. 90(2), pages 426-432, May.
    45. Omar Al-Ubaydli & Daniel Houser & John V.C. Nye & Maria Pia Paganelli & Xiaofei (Sophia) Pan, 2011. "The Causal Effect of Market Participation on Trust: An Experimental Investigation Using Randomized Control," Working Papers 1027, George Mason University, Interdisciplinary Center for Economic Science.
    46. Josef Falkinger, 2000. "A Simple Mechanism for the Efficient Provision of Public Goods: Experimental Evidence," American Economic Review, American Economic Association, vol. 90(1), pages 247-264, March.
    47. Carpenter, Jeffrey & Bowles, Samuel & Gintis, Herbert & Hwang, Sung-Ha, 2009. "Strong reciprocity and team production: Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 71(2), pages 221-232, August.
    48. Frey, Bruno S, 1997. "A Constitution for Knaves Crowds Out Civic Virtues," Economic Journal, Royal Economic Society, vol. 107(443), pages 1043-1053, July.
    49. Jean-Jacques Laffont & Mohamed Salah Matoussi, 1995. "Moral Hazard, Financial Constraints and Sharecropping in El Oulja," Review of Economic Studies, Oxford University Press, vol. 62(3), pages 381-399.
    50. Henry J. Aaron, 1994. "Distinguished Lecture on Economics in Government: Public Policy, Values, and Consciousness," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 3-21, Spring.
    51. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
    52. Houser, Daniel & Xiao, Erte & McCabe, Kevin & Smith, Vernon, 2008. "When punishment fails: Research on sanctions, intentions and non-cooperation," Games and Economic Behavior, Elsevier, vol. 62(2), pages 509-532, March.
    53. Patricia Funk, 2007. "Is There An Expressive Function of Law? An Empirical Analysis of Voting Laws with Symbolic Fines," American Law and Economics Review, Oxford University Press, vol. 9(1), pages 135-159.
    54. Steven D. Levitt & John A. List, 2007. "What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World?," Journal of Economic Perspectives, American Economic Association, vol. 21(2), pages 153-174, Spring.
    55. Juan Cardenas, 2011. "Social Norms and Behavior in the Local Commons as Seen Through the Lens of Field Experiments," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(3), pages 451-485, March.
    56. Jean Tirole, 1999. "Incomplete Contracts: Where Do We Stand?," Econometrica, Econometric Society, vol. 67(4), pages 741-782, July.
    57. H. Peyton Young & Mary A. Burke, 2001. "Competition and Custom in Economic Contracts: A Case Study of Illinois Agriculture," American Economic Review, American Economic Association, vol. 91(3), pages 559-573, June.
    58. Kreps, David M, 1997. "Intrinsic Motivation and Extrinsic Incentives," American Economic Review, American Economic Association, vol. 87(2), pages 359-364, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    preferences; incentives; social goods; experiments.;

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nos:voprec:2013-05-4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sergei Parinov). General contact details of provider: http://www.vopreco.ru/eng/year.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.