Pro Bono Work, Corporate Social Responsibility and Trust in Expert Fields

Abstract

A controversy has been simmering in law about whether pro bono work should be mandatory for lawyers. This debate has tended to neglect the credence good aspect of the services of experts (e.g., of doctors, lawyers, and accountants), and the role that voluntary pro bono work might play. Expert services have unverifiable quality to non-experts and are subject to moral hazard. Experts who cheat their customers should crowd out experts who do not, resulting in low trust, prestige, and wages. We ask how pro bono work might promote trust in expert fields. We introduce incomplete information into a psychological game theoretic model of experts who value the esteem from their customers. In our model, pro bono work arises in equilibrium because experts who value the perception of honesty among their customers more are also more willing to give away labor to the poor to signal their honesty. We show that if the aversion to disappointing this esteem is sufficiently high, there is a unique equilibrium in which their wages are high, they do pro bono work, and experts who would have been dishonest are crowded out of the field. Our findings suggest that mandatory pro bono work could decrease service quality.