Reaching for the Stars: An Experimental Study of the Consumption Value of Social Approval

MAGKS Discussion Paper No. 08-2012

25 Pages Posted: 10 Aug 2012

See all articles by Matthias Greiff

Matthias Greiff

Clausthal University of Technology - Department of Economics and Business Administration

Fabian Paetzel

University of the German Federal Armed Forces - Helmut Schmidt Universität; DFG Research Group 2104

Date Written: January 30, 2012

Abstract

We present a theoretical model of a linear public good game in which heterogeneous players express social approval after observing contributions. The model explains how social approval is expressed and predicts positive contributions if subjects have a preference for social approval. Using a controlled laboratory experiment we test our model. In the experiment, subjects conduct computerized tasks that require substantial effort resulting in endowments from which contributions can be made to a linear public good. After observing others’ contributions subjects express social approval. Our main hypothesis is that subjects have a preference for social approval so that the expression of social approval will increase contributions, even if reputation building is impossible. We vary the information available to subjects and investigate how this affects the expression of social approval and individual contributions. Our main finding is that the expression of social approval significantly increases contributions. However, the increase in contributions is smaller if additional information is provided, suggesting that social approval is more effective if subjects receive a noisy signal about others’ contributions.

Keywords: experimental economics, linear public good games, non-monetary incentives, social approval

JEL Classification: C72, C91, D71, D83

Suggested Citation

Greiff, Matthias and Paetzel, Fabian, Reaching for the Stars: An Experimental Study of the Consumption Value of Social Approval (January 30, 2012). MAGKS Discussion Paper No. 08-2012, Available at SSRN: https://ssrn.com/abstract=2127067 or http://dx.doi.org/10.2139/ssrn.2127067

Matthias Greiff (Contact Author)

Clausthal University of Technology - Department of Economics and Business Administration ( email )

Julius-Albert-Str. 2
Clausthal-Zellerfeld D-38678
Germany

Fabian Paetzel

University of the German Federal Armed Forces - Helmut Schmidt Universität ( email )

Holstenhofweg 85
Hamburg, 22008
Germany

DFG Research Group 2104 ( email )

Holstenhofweg 85
Hamburg, DE 22043
Germany

HOME PAGE: http://bedarfsgerechtigkeit.hsu-hh.de/en?set_language=en

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