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Incentives and Prosocial Behavior

Resource type
Authors/contributors
Title
Incentives and Prosocial Behavior
Abstract
We develop a theory of prosocial behavior that combines heterogeneity in individualaltruism and greed with concerns for social reputation or self-respect. Rewards orpunishments (whether material or image-related) create doubt about the true motivefor which good deeds are performed, and this ?overjustification effect? can inducea partial or even net crowding out of prosocial behavior by extrinsic incentives. Wealso identify the settings that are conducive to multiple social norms and, moregenerally, those that make individual actions complements or substitutes, which weshow depends on whether stigma or honor is (endogenously) the dominant reputationalconcern. Finally, we analyze the socially optimal level of incentives and howmonopolistic or competitive sponsors depart from it. Sponsor competition is shownto potentially reduce social welfare. (JEL D11, D64, D82, Z13)
Publication
American Economic Review
Volume
96
Issue
5
Pages
1652-1678
Date
2006-12
Citation
Bénabou, R., & Tirole, J. (2006). Incentives and Prosocial Behavior. American Economic Review, 96, 1652–1678.
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