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When a Nudge Backfires:Using Observation with Social and Economic Incentives to Promote Pro-Social Behavior

Gary Bolton (), Eugen Dimant () and Ulrich Schmidt
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Gary Bolton: University of Texas at Dallas

No 2019-03, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham

Abstract: Both theory and recent empirical evidence on nudging suggest that observability of behavior acts as an instrument for promoting (discouraging) pro-social (anti-social) behavior. Our study questions the universality of these claims. We employ a novel four-party setup to disentangle the roles that the relevant observational mechanisms play in affecting pro-/antisocial behavior. We systematically vary the observability of one's actions by others as well as the (non-)monetary relationship between observer and observee. Observability involving economic incentives crowds-out anti-social behavior in favor of more pro-social behavior. Surprisingly, observation without economic consequences fails to achieve any aggregate pro-social effect, and if anything it backfires. In additional experiments we confirm that this backfiring effect is driven by inequity concerns. We propose and successfully test a solution: increasing the focus on the underlying social norms.

Keywords: Anti-Social Behavior; Experiment; Nudge; Pro-Social Behavior; Reputation (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-evo and nep-exp
Date: 2019-03
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Working Paper: When a Nudge Backfires. Using Observation with Social and Economic Incentives to Promote Pro-Social Behavior (2018) Downloads
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