Doing Good or Doing Well? Image Motivation and Monetary Incentives

No. 07‐9 Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially Dan Ariely, Anat Bracha, and Stephan Meier Abstract: This paper examines image motivation—the desire to be liked and well‐regarded by others— as a driver in prosocial behavior (doing good), and asks whether extrinsic monetary incentives (doing well) have a detrimental effect on prosocial behavior due to crowding out of image motivation. By definition, image depends on one’s behavior being visible to other people. Using this

unique property we show that image is indeed an important part of the motivation to behave prosocially. Moreover, we show that extrinsic incentives interact with image motivation and are therefore less effective in public than in private. Together, these results imply that image motivation is crowded out by monetary incentives; this means that monetary incentives are more likely to be counterproductive for public prosocial activities than for private ones. JEL Classifications: D64, C90, H41 Dan Ariely is the Alfred P. Sloan Professor of Behavioral Economics at the Massachusetts Institute of Technology’s Sloan School of Management. His email address is ariely@mit.edu. Anat Bracha is a professor at the Eitan Berglas School of Economics, Tel Aviv University. Her email address is bracha@post.tau.ac.il. Stephan Meier is a Senior Economist at the Federal Reserve Bank of Boston. His email address is Stephan.Meier@bos.frb.org. The authors are grateful to Robert Frank, Bruno S. Frey, Andreas Fuster, Ayelet Gneezy, Uri Gneezy, Lorenz Goette, Alois Stutzer, Jean Tirole, seminar participants at MIT, UCLA, and the University of Zurich, participants at the Affect, Motivation, and Decision Making Conference 2006, the 2007 ASSA meetings, and the French Economic Association on Behavioral Economics and Experiments 2007 for helpful comments. They thank...

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