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Social responsibility and incentives in the lab: Why do agents exert more effort when principals donate?

Agne Kajackaite and Dirk Sliwka

Journal of Economic Behavior & Organization, 2017, vol. 142, issue C, 482-493

Abstract: We test experimentally whether and why principals’ charitable giving affects agents’ efforts. We study a simple principal-agent setting in the lab, where a principal decides whether to donate a fixed amount to a charity and, in the next step, an agent chooses his effort. We argue there are three potential mechanisms that can trigger a higher effort after a donation in this setting: distributional concerns, reciprocal altruism, and shared warm glow utility. We find agents choose higher efforts when principals donate. With respect to the mechanisms, we find evidence for reciprocal altruism and distributional concerns as drivers of agents’ performance reactions in the lab.

Keywords: Corporate Social responsibility; Incentives; Reciprocity; Intentions; Equity; Experiment; Warm glow (search for similar items in EconPapers)
JEL-codes: C92 D03 J33 M52 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1016/j.jebo.2017.08.013

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Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

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Handle: RePEc:eee:jeborg:v:142:y:2017:i:c:p:482-493