Abstract
We investigate the interaction effects of prosocial incentives and loss aversion on entry into and performance within competitive environments within the context of a real-effort experiment. When competing in the gain domain, individuals are less likely to enter into a competitive winner-take-all tournament if they are competing for a prosocial cause versus for themselves. When individuals are given a resource endowment up front and real losses are incurred, we find the opposite effect, individuals are more likely to enter competition for a prosocial cause than for themselves. These findings add to extant literature on prosocial incentives and competitive entry, which have mainly focused upon incentives that are framed as gains. This study contributes to the strategic human capital literature by investigating the differential effects of pecuniary incentives and productivity and provides implications for organizations in how they incentivize and develop human talent.
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