The whip and the Bible : punishment versus internalization
Journal of public economic theory, 2021, Vol. 23, No. 5, pp. 858-894
DUTTA, Rohan, LEVINE, David K., MODICA, Salvatore, The whip and the Bible : punishment versus internalization, Journal of public economic theory, 2021, Vol. 23, No. 5, pp. 858-894 - https://hdl.handle.net/1814/72341
Retrieved from Cadmus, EUI Research Repository
A variety of experimental and empirical research indicate that prosocial behavior is important for economic success. There are two sources of prosocial behavior: incentives and preferences. The latter, the willingness of individuals to “do their bit” for the group, we refer to as internalization, because we view it as something that a group can influence by appropriate investment. This implies that there is a trade-off between using incentives and internalization to encourage prosocial behavior. By examining this trade-off we shed light on the connection between social norms observed inside the laboratory and those observed outside in the field. For example, we show that a higher value of cooperation outside the laboratory may lower the use of incentives inside the laboratory even as it increases their usage outside. As an application we show that the model calibrated to experimental data makes reasonable out-of-sample quantitative forecasts.
First published online: 27 August 2021
Cadmus permanent link: https://hdl.handle.net/1814/72341
Full-text via DOI: 10.1111/jpet.12540
ISSN: 1097-3923; 1467-9779
Sponsorship and Funder information:
This article was published Open Access with the support from the EUI Library through the CRUI - Wiley Transformative Agreement (2020-2023)
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