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Will There Be Blood? Incentives And Substitution Effects In Pro-Social Behavior

  • Lacetera, Nicola
  • Macis, Mario
  • Slonim, Robert

We present evidence from observational data on nearly 14,000 American Red Cross blood drives and from a randomized natural field experiment showing that economic incentives have a positive effect on blood donations without increasing the fraction of donors who come to a drive but are ineligible to donate. We also show that the effect of incentives on donations increases with the incentive's economic value. However, we further show that a substantial proportion of the increase in donations due to incentives may be explained by donors leaving neighboring drives without incentives to attend the drive with incentives, and the likelihood of this substitution is higher the higher the monetary value of the incentive offered. We conclude that extrinsic incentives stimulate pro-social behavior, but, unless substitution effects are also considered, the effect of incentives may be overesti mated.

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File URL: http://hdl.handle.net/2123/6958
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Paper provided by University of Sydney, School of Economics in its series Working Papers with number 2010-02.

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Date of creation: Oct 2010
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Handle: RePEc:syd:wpaper:2123/6958
Contact details of provider: Postal: Sydney, NSW 2006
Phone: 61 +2 9351 5055
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Web page: http://sydney.edu.au/arts/economics
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  1. Rick Harbaugh & Theodore To, 2005. "False Modesty: When Disclosing Good News Looks Bad," Working Papers 2005-05, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
  2. Polborn Mattias K, 2008. "Competing for Recognition through Public Good Provision," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 8(1), pages 1-25, September.
  3. Stephan Meier, 2006. "A survey of economic theories and field evidence on pro-social behavior," Working Papers 06-6, Federal Reserve Bank of Boston.
  4. Lorenz Goette & Alois Stutzer, 2008. "Blood Donations and Incentives: Evidence from a Field Experiment," Working papers 2008/04, Faculty of Business and Economics - University of Basel.
  5. Dan Ariely & Anat Bracha & Stephan Meier, 2007. "Doing good or doing well? Image motivation and monetary incentives in behaving prosocially," Working Papers 07-9, Federal Reserve Bank of Boston.
  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, 06.
  7. Gary S. Becker & Julio Jorge El�as, 2007. "Introducing Incentives in the Market for Live and Cadaveric Organ Donations," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 3-24, Summer.
  8. Garbarino, Ellen & Slonim, Robert, 2009. "The robustness of trust and reciprocity across a heterogeneous U.S. population," Journal of Economic Behavior & Organization, Elsevier, vol. 69(3), pages 226-240, March.
  9. John List, 2008. "Informed consent in social science," Artefactual Field Experiments 00086, The Field Experiments Website.
  10. repec:feb:artefa:0106 is not listed on IDEAS
  11. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-55, September.
  12. Roth, Alvin, 2007. "Repugnance as a Constraint on Markets," Scholarly Articles 2624677, Harvard University Department of Economics.
  13. Lacetera, Nicola & Macis, Mario, 2010. "Social image concerns and prosocial behavior: Field evidence from a nonlinear incentive scheme," Journal of Economic Behavior & Organization, Elsevier, vol. 76(2), pages 225-237, November.
  14. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough Or Don'T Pay At All," The Quarterly Journal of Economics, MIT Press, vol. 115(3), pages 791-810, August.
  15. Harbaugh, William T, 1998. "The Prestige Motive for Making Charitable Transfers," American Economic Review, American Economic Association, vol. 88(2), pages 277-82, May.
  16. Lacetera, Nicola & Macis, Mario, 2008. "Motivating Altruism: A Field Study," IZA Discussion Papers 3770, Institute for the Study of Labor (IZA).
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