The Price of a Price: On the Crowding out of Social Norms
2001-06-30
Research Paper
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There is increasing empirical and experimental evidence that providing financial incentives to agents to perform certain socially desirable actions may permanently reduce other types of motivations to undertake these actions. We study the impact of financial incentives on the desire for social approval, using the example of blood donation. We show that in a society with altruists and egoists, who all care about social approval, introducing a payment into a voluntary system may actually decrease the amount of blood donated. Withdrawing the financial incentive does not restore the norm to donate and may reduce the supply of blood even further.
Keywords
Classifications using
Journal of Economic Literature (JEL) Classification System
- I18 : Government Policy; Regulation; Public Health
- D10 : Household Behavior and Family Economics: General
- Z13 : Social Norms and Social Capital; Social Networks
Automatically Extracted Terms
- altruists
- equilibrium
- reward
- blood
- egoist
- donor
- number
- utility
- result
- blood supply
- equilibria
- supply
- motivation
- medium
- incentive
- system
- basin
- attraction
- people
- effect
