Incentives and Prosocial Behaviour

Roland Benabou () and Jean Tirole

No 4633, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We build a theory of prosocial behaviour that combines heterogeneity in individual altruism and greed with concerns for social reputation or self-respect. The presence of rewards or punishments creates doubt as to the true motive for which good deeds are performed, and this ‘overjustification effect’ can result in a net crowding out of prosocial behaviour by extrinsic incentives. The model also allows us to identify settings that are conducive to multiple social norms of behaviour, and those where disclosing one’s generosity may backfire. Finally, we analyse the equilibrium contracts offered by sponsors, including the level and confidentiality or publicity of incentives. Sponsor competition may cause rewards to bid down rather than up, and can even reduce social welfare by requiring agents to engage in inefficient sacrifices.

Keywords: altruism; crowding out; D64; identity; motivation; overjustification effect; reputation; rewards; social norms; Z13 (search for similar items in EconPapers)
JEL-codes: D82 H41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-evo and nep-pbe
Date: Written
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Related works:
Working Paper: Incentives and Prosocial Behavior (2005)
Working Paper: Incentives and Prosocial Behavior (2006)
Working Paper: Incentives and Prosocial Behavior (2004)
Working Paper: Incentives and Prosocial Behavior (2005)
Journal Article: Incentives and Prosocial Behavior (2006)
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