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

47 Pages Posted: 26 Dec 2018 Last revised: 8 Jun 2021

See all articles by Gary Bolton

Gary Bolton

University of Texas at Dallas - Naveen Jindal School of Management

Eugen Dimant

University of Pennsylvania; CESifo

Ulrich Schmidt

University of Kiel - Institute of Economics

Date Written: June 8, 2021

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

Suggested Citation

Bolton, Gary and Dimant, Eugen and Schmidt, Ulrich, Observability and Social Image: On the Robustness and Fragility of Reciprocity (June 8, 2021). Available at SSRN: https://ssrn.com/abstract=3294375 or http://dx.doi.org/10.2139/ssrn.3294375

Gary Bolton

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Eugen Dimant (Contact Author)

University of Pennsylvania ( email )

Philadelphia, PA 19104
United States

HOME PAGE: http://sites.google.com/view/eugendimant/

CESifo ( email )

Poschinger Str. 5
Munich
Germany

Ulrich Schmidt

University of Kiel - Institute of Economics ( email )

Olshausenstrasse 40
24098 Kiel, 24098
Germany

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