Will There Be Blood? Incentives and Substitution Effects in Pro-social Behavior We examine how economic incentives affect pro-social behavior through the analysis of a unique dataset with information on more than 14,000 American Red Cross blood drives. Our findings are consistent with blood donors responding to incentives in a “standard” way; offering donors economic incentives significantly in...

In experimental investigations of the effect of real incentives, accountability—the implicit or explicit expectation of a decision maker that she may have to justify her decisions in front of somebody else—is often confounded with the incentives themselves. This confounding of accountability with incentives makes causal attributions of any effects found problematic. We separate accountability a...

The paper studies the incentives to form collusive agreements when goods can be traded in second-hand markets. It will be shown that such incentives crucially depend on the rate of depreciation of the durable good and on consumer heterogeneity. The main contribution of the paper shows that an active second-hand market may strengthen the incentives to collude, as do policies that affect the func...

Efficiency under contractual incompleteness often requires voluntary cooperation in situations where self-regarding incentives for contractual compliance are present as well. Here we provide a comprehensive experimental analysis based on the gift-exchange game of how explicit and implicit incentives affect cooperation. We first show that there is substantial cooperation under non-incentive comp...

When effort is multi-dimensional, firms will optimally “balance” the provision of incentives. Setting high-powered incentives along one dimension raises the returns to providing high-powered incentives along other dimensions which compete for the worker’s effort and/or attention (Holmstrom and Milgrom, 1991). We test for this effect in the context of for-profit pharmaceutical laboratories using...

Incentives for organ donation, currently prohibited in most countries, may increase donation and save lives. Discussion of incentives has focused on two areas: (1) whether or not there are ethical principles that justify the current prohibition and (2) whether incentives would do more good than harm. We herein address the second concern and propose for discussion standards and guidelines for an...

The existence of an optimal level of knowledge sharing has often been identified as a prime antecedent of effective knowledge management. Organizations often devote much effort towards ensuring an adequate level of knowledge sharing between members of their organization, and tend to rely on incentive systems, also referred to as ‘extrinsic benefits’, to encourage this. While developing incentiv...

Spousal and Survivor Benefits in Option Value Models of Retirement: An Application to Belgium1 We study retirement incentives with augmented option value model à la Stock and Wise (1990). We propose methodological extensions to better reflect the respective incentives faced by singles and couples. Our results show that a more comprehensive modelling of couples’ incentives leads to very differen...

Researchers vigorously debate the impact of incentives in preference reversal experiments. Do incentives alter behavior and generate economically consistent choices? Lichtenstein and Slovic (1971) document inconsistencies (reversals) in revealed preference in gamble pairs across paired choice and individual pricing tasks. The observed pattern is inconsistent with stable underlying preferences e...