Who Cares for Social Image? Interactions between Intrinsic Motivation and Social Image Concerns

Abstract

We consider the interaction of intrinsic motivation and concerns for social approval in a laboratory experiment. We elicit a proxy for Fairtrade preferences before the experiment in which we elicit willingness to pay for conventional and Fairtrade chocolate. Treatments vary whether this can be signaled to other participants. Subjects concerned with social approval should state a higher Fairtrade premium when signaling is possible. We find that this is the case, but interestingly only for participants who are not intrinsically motivated to buy Fairtrade. This has important implications both for crowding out of intrinsic motivation through incentives and for producer choices.

Keywords: image concerns, Fairtrade, ethical consumption, crowding out, experiments

JEL Classification: D030, C910