Incentive-Induced Social Tie and Subsequent Altruism and Cooperation

Abstract

Abstract In this paper, we studied the spillover effects of cooperative and competitive incentive schemes on subsequent decisions involving altruism and cooperation. We collected data with a laboratory experiment where subjects were asked to perform Mini Dictator games and a Public Good game after playing an incentivized real effort task. We found that cooperative incentives foster higher subsequent altruism and cooperation as compared with competitive or individual incentives. By contrast, competitive incentives induced more envy towards competitor peers and more spiteful behaviour when giving implies a larger payoff for the recipient. The effect of incentives on altruism and cooperation was moderated by relative rank in the incentivized effort task and by individual level of impulsivity.