Will There Be Blood? Incentives and Substitution Effects in Pro-Social Behavior

Posted: 6 Jul 2011

See all articles by Mario Macis

Mario Macis

Johns Hopkins University - Carey Business School; IZA Institute of Labor Economics; National Bureau of Economic Research (NBER)

Nicola Lacetera

University of Toronto - Strategic Management; University of Toronto at Mississauga - Department of Management; National Bureau of Economic Research (NBER)

Robert Slonim

The University of Sydney; IZA Institute of Labor Economics

Date Written: June 2010

Abstract

We examine how economic incentives affect pro-social behavior through the analysis of a unique dataset with information on over 14,000 American Red Cross blood drives. Our findings are consistent with blood donors responding to incentives in a "standard" way; offering donors economic incentives significantly increases turnout and blood units collected, and more so the greater the incentive's monetary value. In addition, there is no disproportionate increase in donors who come to a drive but are ineligible do donate when incentives are offered. Further evidence from a small-scale field experiment corroborates these findings and confirms that donors are motivated by the economic value of the items offered. We also find that a substantial fraction of the increase in donations due to incentives may be explained by donors substituting away from neighboring drives toward drives where rewards are offered, and the likelihood of this substitution is higher if neighboring drives do not offer incentives. Thus, extrinsic incentives motivate pro-social behavior, but unless substitution effects are also considered, the effect of incentives may be overestimated.

Keywords: altruism, Incentives, pro-social behavior, public good provision, public health

Suggested Citation

Macis, Mario and Lacetera, Nicola and Slonim, Robert, Will There Be Blood? Incentives and Substitution Effects in Pro-Social Behavior (June 2010). American Society of Health Economists (ASHEcon) Paper . Available at SSRN: https://ssrn.com/abstract=1880528

Mario Macis (Contact Author)

Johns Hopkins University - Carey Business School ( email )

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Baltimore, MD 21202
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Nicola Lacetera

University of Toronto - Strategic Management ( email )

Canada

University of Toronto at Mississauga - Department of Management

Canada

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robert Slonim

The University of Sydney ( email )

University of Sydney
Sydney, NC NSW 2006
Australia

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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