Prosocial Incentives Change Willingness to Compete in Work Tasks: The Role of Gender and Performance

Abstract

This study examines the effects of prosocial incentives, where charities benefit from an individual’s efforts, on workers’ willingness to compete in a work task in an experimental setting. Counter to expectations and prior literature, prosocial incentives reduce a worker’s willingness to compete. Women across all levels of performance are largely driving this result, though lower performing men also appear to opt out of competition more often to take guaranteed wages for charity. With so many low performers opting out of competitions that they would lose to take guaranteed payment, I observe that performance-based earnings increased under the prosocial incentives scheme. Qualitative evidence suggest an underlying mechanism, the fear of getting zero for charity, is the main reason for the change and that women were more likely to report this fear. A second experiment finds that eliminating the possibility of getting zero —with lower payout variance and increased expected returns to competition, results in top performing women become as likely as men to enter competition in work tasks with prosocial incentives. I discuss how these insights could inform the design of incentives in the field.