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Comparing the effects of non-monetary incentives and monetary incentives on prosocial behavior

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  • Asulin, Yamit
  • Heller, Yuval
  • Munichor, Nira

Abstract

The crowding-out effects predict that offering monetary incentives to complete a task might negatively affect task performance because the monetary rewards crowd out non-monetary sources of value that people derive from task completion. In this study, we revisit a well-known field experiment by Gneezy and Rustichini (2000) that provides evidence for crowding-out effects in the context of prosocial behavior. We test the robustness of these effects using a larger sample and adjust the experiment's design to better elucidate the role of non-monetary incentives in prosocial behavior. Specifically, we assigned 245 pairs of high school students to different incentives for collecting donations for charity: low monetary incentives (1 % of total donations collected), high monetary incentives (10 % of total donations collected), non-monetary incentives (enhanced task importance and public recognition), or no external incentives. We made it explicit to the students that the monetary incentives were funded by the researchers, not the charities. In line with crowding-out effects and Gneezy and Rustichini's (2000) findings, our results show that low monetary incentives elicit lower performance (collected donations) compared with the absence of external incentives. Importantly, non-monetary incentives elicit higher performance compared with either monetary incentives or the absence of external incentives.

Suggested Citation

  • Asulin, Yamit & Heller, Yuval & Munichor, Nira, 2024. "Comparing the effects of non-monetary incentives and monetary incentives on prosocial behavior," European Economic Review, Elsevier, vol. 165(C).
  • Handle: RePEc:eee:eecrev:v:165:y:2024:i:c:s0014292124000692
    DOI: 10.1016/j.euroecorev.2024.104740
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    References listed on IDEAS

    as
    1. Uri Gneezy & Aldo Rustichini, 2000. "Pay Enough or Don't Pay at All," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 791-810.
    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.
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    4. Uri Gneezy & Stephan Meier & Pedro Rey-Biel, 2011. "When and Why Incentives (Don't) Work to Modify Behavior," Journal of Economic Perspectives, American Economic Association, vol. 25(4), pages 191-210, Fall.
    5. Graf, Caroline & Suanet, Bianca & Wiepking, Pamala & Merz, Eva-Maria, 2023. "Social norms offer explanation for inconsistent effects of incentives on prosocial behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 429-441.
    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.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Prosocial behavior; Crowding out; Field experiments; Non-monetary incentives; Monetary incentives; Real-effort experiment;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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