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Using Money To Motivate Both Saints And Sinners: A Field Experiment On Motivational Crowding-Out

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  • Antoine BERETTI
  • Charles FIGUIERES
  • Gilles GROLLEAU

Abstract

Economists recognize that monetary incentives can backfire through the crowding-out of moral and social motivations leading to an overall decrease of the desired behavior. We implement a field experiment where participants are asked to fill a questionnaire on pro-environmental behaviors under different incentive schemes, either with no monetary incentive (control) or with low or high monetary incentive directed either to the respondents or to an environmental cause. We investigate whether (i) there is a significant crowding-out effect, (ii) directing monetary incentive to the cause rather than to the respondents reduces the overall impact of a crowding-out effect, and (iii) offering the choice regarding the money recipient a ects participation. Except for a high monetary incentive where the respondent chooses himself the end-recipient, we show that monetary rewards directed either at the individual or at the cause actually harms intrinsic motivations, but not to the same extent. We formalize our results building on an adaptation of an original model by Bolle and Otto (2010) and introduce agents heterogeneity in terms of intrinsic motivation. This heterogeneity has key implications for the understanding of the crowding-out e ect. Several policy recommendations regarding the use of market-based instruments are drawn.

Suggested Citation

  • Antoine BERETTI & Charles FIGUIERES & Gilles GROLLEAU, 2011. "Using Money To Motivate Both Saints And Sinners: A Field Experiment On Motivational Crowding-Out," Working Papers 11-15, LAMETA, Universtiy of Montpellier, revised Jun 2011.
  • Handle: RePEc:lam:wpaper:11-15
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    File URL: http://www.lameta.univ-montp1.fr/Documents/DR2011-15.pdf
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    References listed on IDEAS

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    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. 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.
    3. Jean Tirole & Roland Bénabou, 2006. "Incentives and Prosocial Behavior," American Economic Review, American Economic Association, vol. 96(5), pages 1652-1678, December.
    4. Bruno Frey & Matthias Benz & Alois Stutzer, 2004. "Introducing Procedural Utility: Not Only What, but Also How Matters," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 160(3), pages 377-401, September.
    5. Dickinson, David & Villeval, Marie-Claire, 2008. "Does monitoring decrease work effort?: The complementarity between agency and crowding-out theories," Games and Economic Behavior, Elsevier, vol. 63(1), pages 56-76, May.
    6. 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.
    7. Reeson, Andrew F. & Tisdell, John G., 2008. "Institutions, motivations and public goods: An experimental test of motivational crowding," Journal of Economic Behavior & Organization, Elsevier, vol. 68(1), pages 273-281, October.
    8. Friedel Bolle & Philipp E. Otto, 2010. "A Price Is a Signal: on Intrinsic Motivation, Crowding-out, and Crowding-in," Kyklos, Wiley Blackwell, vol. 63(1), pages 9-22, February.
    9. Armin Falk, 2007. "Gift Exchange in the Field," Econometrica, Econometric Society, vol. 75(5), pages 1501-1511, September.
    10. Frey, Bruno S & Jegen, Reto, 2001. " Motivation Crowding Theory," Journal of Economic Surveys, Wiley Blackwell, vol. 15(5), pages 589-611, December.
    11. Dickinson, David & Villeval, Marie-Claire, 2008. "Does monitoring decrease work effort?: The complementarity between agency and crowding-out theories," Games and Economic Behavior, Elsevier, vol. 63(1), pages 56-76, May.
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    Cited by:

    1. Cecere, Grazia & Mancinelli, Susanna & Mazzanti, Massimiliano, 2014. "Waste prevention and social preferences: the role of intrinsic and extrinsic motivations," Ecological Economics, Elsevier, vol. 107(C), pages 163-176.
    2. Antoine Beretti & Charles Figuières & Gilles Grolleau, 2014. "An Instrument that Could Turn Crowding-out into Crowding-in," Working Papers 2014.04, FAERE - French Association of Environmental and Resource Economists.

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