1. Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially By Dan Ariely, Anat Bracha, and Stephan Meier Experimental & Behavioral Economics Siyeon Sean Lee 30/05/2016

4. 1 Behavioral Hypotheses Image-Motivation Hypothesis Ceteris paribus, changing visibility changes the level of prosocial activity. -For a positive image, increasing visibility increases the level of prosocial activity -Higher personal benefits associated with a prosocial activity tends to decrease its image value Effectiveness Hypothesis Extrinsic rewards are less effective the greater is the visibility of the prosocial act → Crowding-out of image motivation

5. 2 Experimental Design “Click For Charity” - Three criteria to fulfill 1)The prosocial task needs to have clear image implications 2)One’s decision has to be made either public or private 3)Extrinsic monetary incentives have to be either offered or not -A real-effort task: sequentially pressing two keys-X and Z-on the keyboard for up to five minutes -161 Princeton undergraduates participated -The more pairs pressed → the higher the effort → the greater the donation

6. “Click For Charity” 2 X 2 X 2 Design - The visibility of the task : whether to make their effort choice in public or in private - The payment scheme : whether they earn money for themselves - The nature of the cause : the American Red Cross or the NRA -Making an effort to benefit one of these charities is expected to have signaling value -The value of signal depends on other observers’ opinions: either “good” or “bad” -Here, the two charities are classified according to the participants’ perception of the majority’s view

7. 3 Results -Subjects exerted more effort for a good cause in public, where they are able to signal their effort to many others -While monetary incentives do not increase the effort expended in public, they do increase effort significantly in the private condition

8. -Offering monetary incentives is less effective at increasing effort in public than in private

9. 4 Field Study “Bike for Charity” -Though the effect obtained in the field is not as strong as in the lab, the result still supports the Effectiveness Hypothesis -There are still differential effects of monetary incentives between the public and the private conditions

10. 5 Conclusions Supporting results -Monetary incentives depend crucially on visibility: they are more effective in facilitating private, rather than public, prosocial activity -Image value: Doing good > Doing well for oneself -Policy implications: In order to avoid crowding-out effect(damaging the signaling value), policy makers should pay attention both to the visibility of the prosocial decision and the extrinsic incentives.

11. Food for thought (further questions) -How the results of this research translate to other circumstances, e.g., to societies where volunteering is not perceived as honorably. -How is image-motivation constructed? -Does crowding-out of image motivation depend on the type of extrinsic incentive used?