Incentives and prosocial behavior

Abstract

NBER WORKING PAPER SERIES INCENTIVES AND PROSOCIAL BEHAVIOR Roland Bénabou Jean Tirole Working Paper 11535 http://www.nber.org/papers/w11535 NATIONAL BUREAU OF ECONOMIC RESEARCH 1050 Massachusetts Avenue Cambridge, MA 02138 August 2005 We thank for useful comments George Akerlof, Roland Fryer, Timur Kuran, Bentley MacLeod, Tom Romer, Armin Falk, participants at various seminars and conferences and three anonymous referees. We are especially indebted to Ian Jewitt for valuable suggestions. Bénabou gratefully acknowledges support from the John Simon Guggenheim Memorial Foundation in 2004 and from the National Science Foundation. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research. ©2005 by Roland Bénabou and Jean Tirole. All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission provided that full credit, including © notice, is given to the source. Incentives and Prosocial Behavior Roland Bénabou and Jean Tirole NBER Working Paper No. 11535 August 2005 JEL No. D64, D82, H41, Z13 ABSTRACT We develop a theory of prosocial behavior that combines heterogeneity in individual altruism and greed with concerns for social reputation or self-respect. Rewards or punishments (whether material or image-related) create doubt about the true motive for which good deeds are performed and this "overjustification effect" can induce a partial or even net …

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