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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

No 17, PPE Working Papers from Philosophy, Politics and Economics, University of Pennsylvania

Abstract: Both theory and recent empirical evidence on nudging suggests 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 three observational mechanisms play in mediating 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, social observation without economic incentives fails to achieve any aggregate pro-social effect, and if anything it backfires. Additional experiments confirm that observability without additional monetary incentives can indeed backfire. However, they also show that the effect of observability on pro-social behavior is increased when social norms are made salient.

Keywords: Anti-Social Behavior; Experiment; Nudge; Pro-Social Behavior; Reputation (search for similar items in EconPapers)
JEL-codes: C91 D64 D9 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-soc
Date: 2018-12
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