Incentives and Prosocial Behavior

Jean Tirole and Roland Benabou

American Economic Review, 2006, vol. 96, issue 5, 1652-1678

Abstract: We develop a theory of prosocial behavior that combines heterogeneity in individual altruism and greed with concerns for social reputation or self-respect. Rewards or punishments (whether material or image-related) create doubt about the true motive for which good deeds are performed, and this ?overjustification effect? can induce a partial or even net crowding out of prosocial behavior by extrinsic incentives. We also identify the settings that are conducive to multiple social norms and, more generally, those that make individual actions complements or substitutes, which we show depends on whether stigma or honor is (endogenously) the dominant reputational concern. Finally, we analyze the socially optimal level of incentives and how monopolistic or competitive sponsors depart from it. Sponsor competition is shown to potentially reduce social welfare. (JEL D11, D64, D82, Z13)

Date: 2006
Note: DOI: 10.1257/aer.96.5.1652
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1398)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.96.5.1652 (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Incentives and Prosocial Behavior (2006)
Working Paper: Incentives and Prosocial Behavior (2006)
Working Paper: Incentives and Prosocial Behavior (2005)
Working Paper: Incentives and Prosocial Behavior (2005)
Working Paper: Incentives and Prosocial Behaviour (2004)
Working Paper: Incentives and Prosocial Behavior (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aecrev:v:96:y:2006:i:5:p:1652-1678

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().