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Intentions for Doing Good Matter for Doing Well: The Negative Effects of Prosocial Incentives

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  • Lea Cassar
  • Stephan Meier

Abstract

Many firms consider prosocial initiatives to be an effective tool to motivate workers. However, despite some initial supportive evidence, little is known about when and how prosocial incentives work. Our field experiment shows that the instrumental use of prosocial incentives to increase effort can backfire. The negative effect is particularly strong for performance-based prosocial incentives, which are, by construction, more instrumental than unconditional incentives, and for the workers who do not care about the charitable cause. These findings highlight some serious limitations of prosocial incentives: firms’ perceived intentions and the pool of employees will be crucial for their effectiveness.

Suggested Citation

  • Lea Cassar & Stephan Meier, 2021. "Intentions for Doing Good Matter for Doing Well: The Negative Effects of Prosocial Incentives," The Economic Journal, Royal Economic Society, vol. 131(637), pages 1988-2017.
    • Handle: RePEc:oup:econjl:v:131:y:2021:i:637:p:1988-2017.
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    File URL: http://hdl.handle.net/10.1093/ej/ueaa136
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    Cited by:

    1. Au, Pak Hung & Li, King King & Zhang, Qing & Zhu, Rong, 2023. "The Hidden Costs of Choice in the Labor Market," IZA Discussion Papers 16623, Institute of Labor Economics (IZA).
    2. Non, Arjan & Rohde, Ingrid & de Grip, Andries & Dohmen, Thomas, 2022. "Mission of the company, prosocial attitudes and job preferences: A discrete choice experiment," Labour Economics, Elsevier, vol. 74(C).
    3. Millar, Melanie I. & White, Roger M., 2024. "Do residential property assessed clean energy (PACE) financing programs affect local house price growth?," Journal of Environmental Economics and Management, Elsevier, vol. 124(C).
    4. Bigoni, Maria & Ploner, Matteo & Vu, Thi-Thanh-Tam, 2023. "The right person for the right job: workers’ prosociality as a screening device," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 53-73.
    5. Krekel, Christian & Shreedhar, Ganga & Lee, Helen & Marshall, Claire & Boler, Alison & Smith, Allison & Dolan, Paul, 2024. "Happy to help: welfare effects of a nationwide volunteering programme," LSE Research Online Documents on Economics 126209, London School of Economics and Political Science, LSE Library.

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