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The effect of charitable giving on workers’ performance. Experimental evidence

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  • Gary Charness

    () (University of California at Santa Barbara)

  • Ramón Cobo-Reyes

    () (University of Exeter Business School.)

  • Angela Sanchez

    (University of Exeter Business School.)

Abstract

We investigate how donating worker earnings for voluntary extra work, a form of corporate social responsibility, affects worker behavior. In our experiment, participants performed a realeffort task. Subjects were asked to enter real data (from an unrelated experiment) for 60 minutes and were paid on a piece-rate basis. After the 60 minutes, they were then asked if they wished to stay for up to another 30 minutes; we varied the piece-rate pay and whether it was paid to the worker or to a charity. Our results show that when the piece rate paid is relatively high, workers do more extra work when they are directly paid this piece rate as compared to when their earnings are instead paid to a charity. However, with low piece rates, this relationship reverses and workers are much more motivated when the money is donated to a charity instead of when it is paid directly to them. This approach is potentially a win-win outcome for at least firms and charities. We also find that when we only pay a small amount to workers, their behavior differs only modestly from the situation in which we do not pay at all.

Suggested Citation

  • Gary Charness & Ramón Cobo-Reyes & Angela Sanchez, 2014. "The effect of charitable giving on workers’ performance. Experimental evidence," ThE Papers 14/06, Department of Economic Theory and Economic History of the University of Granada..
  • Handle: RePEc:gra:wpaper:14/06
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:jeborg:v:149:y:2018:i:c:p:74-87 is not listed on IDEAS
    2. Gauriot, Romain & Heger, Stephanie A. & Slonim, Robert, 2018. "Altruism or Diminishing Marginal Utility?," IZA Discussion Papers 11721, Institute of Labor Economics (IZA).
    3. Daniel Jones & Mirco Tonin & Michael Vlassopoulos, 2018. "Paying for what kind of Performance? Performance Pay and Multitasking in Mission-Oriented Jobs," CESifo Working Paper Series 7156, CESifo Group Munich.
    4. Dave, Chetan & Hamre, Sjur & Kephart, Curtis & Reuben, Alicja, 2019. "Subjects in the Lab, Activists in the Field: Public Goods and Punishment," Working Papers 2019-6, University of Alberta, Department of Economics.
    5. Kajackaite, Agne & Sliwka, Dirk, 2018. "Prosocial Managers, Employee Motivation, and the Creation of Shareholder Value," IZA Discussion Papers 11789, Institute of Labor Economics (IZA).
    6. repec:eee:jeborg:v:142:y:2017:i:c:p:482-493 is not listed on IDEAS
    7. Daniel Schwartz & Elizabeth A. Keenan & Alex Imas & Ayelet Gneezy, 2017. "Opting-in to Prosocial Incentives," CESifo Working Paper Series 6840, CESifo Group Munich.

    More about this item

    Keywords

    labor market; gift exchange-game; delegation; responsibility-allevietion; experiments.;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D29 - Microeconomics - - Production and Organizations - - - Other
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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