Incentives and Intertemporal Behavioral Spillovers: A Two-Period Experiment on Charitable Giving

ZEW Discussion Paper
ZEW Discussion Paper

Incentives and Intertemporal Behavioral Spillovers: A Two-Period Experiment on Charitable Giving

We test whether and, if so, how incentives to promote pro-social behavior affect the extent to which it spills over to subsequent charitable giving. To do so, we conduct a two-period artefactual field experiment to study repeated donation decisions of more than 700 participants. We vary how participants’ first pro-social behavior is incentivized by a wide range of fundraising interventions ranging from soft to hard paternalism. Our design allows us to decompose spillover effects into a pure spillover effect, which identifies the impact of previous pro-social behavior on subsequent donation decisions and a crowding effect, which captures the extent to which the spillover effects are affected by the incentives exerted on the previous pro-social behavior. We find evidence for negative spillover effects. Participants donate less if they completed a pro-social task prior to the donation decision. Most importantly, we find that the spillover effects depend on how the initial pro-social behavior has been incentivized. Especially participants who are incentivized to donate through social comparisons are more willing to give to charity thereafter compared to participants whose initial pro-social behavior is incentivized by monetary rewards. The variations in spillover effects are driven by participants’ perceived external pressure in the first pro-social decision.

Alt, Marius and Carlo Gallier (2021), Incentives and Intertemporal Behavioral Spillovers: A Two-Period Experiment on Charitable Giving, ZEW Discussion Paper No. 21-010, Mannheim.