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Sunday, November 9, 2008

Incentivizing pro-social behaviour

How do we get citizens to segregate garbage or refrain from littering? How do we incentivize users to keep public toilets clean? How do we stoke the sensibilites of potential donors (cash and kind) to civic and social causes? How do we get residents to participate in civic duties? How can we control cheating among employees and customers? How can we stimulate people to conserve water, electricity, and other resources?

Dan Ariely, Anat Bracha, and Stephan Meier claim that image motivation - the desire to be liked and well regarded by others - incentivizes people to prosocial behavior (doing good). Extrinsic incentives, for example, monetary rewards, interact with image motivation and are therefore less effective in public than in private activities. These results imply that image motivation is crowded out by monetary incentives, either by destroying the sense of "gift" or "civic duty", or by creating doubts about the true motives for which the donations are performed. This means that monetary incentives are more likely to be counterproductive for public prosocial activities than for private ones.

Promotion of donations (monetary and in kind) for social causes, social welfare activities, environment friendly works, and even domestic household chores, may not be optimally achieved with economic incentives, such as pay-for-performance. These actions are best performed by stking the civic and moral sensibilities of individuals.

Standard economic theories have concentrated on monetary compensations, as opposed to rewards that focus on social recognition. Awards lie between intrinsic motivation and extrinsic monetary rewards, the traditional focus of economic research on incentives.

(HT: Incentives for altruism? The case of blood donations

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