Observability and Social Image: On the Robustness and Fragility of Reciprocity

Abstract

Theoretical and empirical findings suggest that individuals are sensitive to the observability of their actions and the downstream consequences of this observability. We connect three streams of literature (social preferences, behavior change, and social norms) to investigate the conditions for which these claims are valid. Across multiple high-powered studies, we examine the mechanisms through which observability of one's actions affects pro-sociality, when and why it sometimes fails, and how to utilize social and economic incentives to enact behavior change. Our three main results are: (i) observability alone has very little positive effect and can even backfire; (ii) inequality aversion drives the observed backfiring of observability; (iii) increasing the salience of norms can mitigate unintended consequences and successfully increase pro-sociality. From a policy perspective, our results highlight the potential pitfalls of simple behavioral interventions.

Keywords: Anti-Social Behavior, Norms, Pro-Social Behavior, Reciprocity, Reputation

JEL Classification: C91, D64, D9