Entry Title: Social Incentives

Authors: Anna Dorfman, Igor Grossmann

Definition

Social incentives concern a broad range of interpersonal rewards and

motivations that encourage people to behave in a socially valued and

approved manner. Social incentives include projecting a positive social

image and reputation, gaining social acceptance, and gaining a better

place in the social hierarchy.

Synonyms

Social rewards; Social motives; Acceptance; Social image

Introduction

Two types of incentives are often considered as the underlying causes of

behavior – economic incentives and social incentives (Buss, 1983). While

economic incentives refer to clear and easily quantifiable monetary

benefits that one can gain from performing a specific behavior, social

incentives are more loosely defined interpersonal rewards and

motivations for behaviors which are usually socially valued.

The idea that social incentives can motivate behaviors is based on the

notion that human beings are social animals with a strong need to

belong (Baumeister & Leary, 1995). This notion suggests that people will

be willing to engage in socially desirable behaviors that relate to this

motivation and serve as social incentives, such as signaling a positive

social image (e.g., Ariely, Bracha, & Meier, 2009), gaining reputation,

social acceptance and approval (e.g., Benabou & Tirole, 2006; Veroff &

Veroff, 1980), receiving affection, praise, and love (Buss, 1983), as well

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as reciprocating and avoiding social disapproval (e.g., Fehr & Falk, 2002).

Social incentives play a central role in human behavior when

relationships among individuals are based on social ties rather than on

money (Fiske, 1992).

Social incentives differ both from economic incentives and from intrinsic

incentives (i.e., intrinsic motivation). Incentives linked to intrinsic

motivation relate to private behaviors that do not necessarily involve

interpersonal aspects (such as freely playing an enjoyable game),

whereas social incentives are social in nature and require a social,

interpersonal setting. To illustrate, paying students for good grades

would constitute a financial incentive, whereas praising students in front

of the class would constitute a social incentive, and allowing students to

perform tasks they find interesting and enjoyable privately without any

extrinsic rewards would reflect on their intrinsic incentives.

Social incentives are closely related to people’s social, other-regarding

preferences (i.e., the extent to which they care about other people’s

outcomes). The presence of social incentives is one of the reasons why

people choose to engage in certain prosocial behaviors, such as helping,

reciprocity, and cooperation, even when such behaviors contradict their

economic self-interest (Benabou & Tirole, 2006; Fehr & Falk, 2002).

Social incentives can be strong motivators of behavior, especially in

public settings. People act more pro-socially when their behavior is

observable by others than when the behavior is private (e.g., Andreoni &

Petrie, 2004; Ariely, Bracha, & Meier, 2009). For example, the decision to

take part in the effortful act of voting is affected by the presence of

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social incentives to perform a publically observable act (in addition to the

intrinsic motivation of self-expression and the satisfaction from fulfilling

a civic duty). Indeed, introducing the option of an unobservable form of

voting (i.e., postal voting), which decreases the cost of voting for the

individual and should therefore theoretically increase voter participation,

has been in fact linked with lower voter participation, especially in small

and close-knit communities (Funk, 2010). This observation suggests that

voting in these communities has likely been influenced by social rather

than intrinsic incentives. As further evidence for the rewarding nature of

social incentives, preliminary insights from neuroimaging studies using

fMRI suggest that specific brain regions related to rewards (i.e., ventral

striatum/nucleus accumbens) are also involved in the reaction to social

incentives such as reputation and in avoidance of social punishments

(e.g., Kohls et al., 2013).

Social versus economic incentives.

When individuals choose to perform socially valued behaviors, such as

donating to charity or buying a hybrid car, these behaviors can be

motivated by monetary gains (e.g., tax benefits). Economic theory

suggests that appropriate monetary incentives are necessary to

motivate behavior. Yet, people often engage in behaviors that are costly

to them even when monetary rewards are absent. In other instances,

people do not change their behavior even when monetary incentives to

do so are introduced. Costly behavior that is not affected by additional

monetary incentives is often explained by social incentives. For example,

Ariely et al. (2009) showed that when a donation is public, adding a

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monetary incentive to the existing social incentive to project a favorable

social image did not increase the effort to donate to a socially favorable

charity. Ariely and colleagues explained this finding in terms of a social

incentive to create a positive social image of a virtuous person,

concluding that for public behaviors, social incentives are effective in

facilitating prosocial behavior. However, in private settings, monetary

incentives are required to facilitate the same prosocial behavior.

Offering monetary incentives for socially-valued behaviors may decrease

or even eliminate behaviors that are driven by social incentives (i.e.,

reputation, acceptance, and approval) because the monetary incentive

can lead to crowding-out of the social incentives (Benabou & Tirole,

2006; see Titmuss, 1970 for a theoretical model). For example, for highly

socially valued prosocial behaviors such as blood donation, it is possible

that attempting to facilitate the behavior by offering money to blood

donors would not increase, or even reduce donations (Titmuss, 1970).

Empirical findings started to support this argument, showing that small

monetary incentives fail to facilitate behaviors like recycling (Burn, 1991)

and collecting charity donations (Gneezy & Rustichini, 2000), in some

occasions even decreasing these behaviors. In other words, when money

is offered to act prosocially, the social incentive of signaling to others

that one is prosocial and creating a favorable image and reputation is no

longer present.

Two additional important social motives introduced in the economic

literature on social incentives are reciprocity and the desire for social

approval (Fehr & Falk, 2002). As with maintaining and signaling positive

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self-image, when a behavior is motivated by the social incentive of

receiving social approval, introducing an additional economic incentive

for the same behavior may backfire, reducing people’s motivation to

engage in this behavior rather than facilitating the behavior.

Social incentives at work.

Social incentives have been studied in relation to people’s behavior at

work. Since the workplace usually involves several interrelated

individuals, social incentives are likely to influence behaviors and

performance in work-related settings (for a recent review, see Ashraf &

Bandiera, 2018). According to Ashraf and Bandiera’s (2018) review, the

effect of social incentives on productivity is positive and economically

significant, resulting in 7-16% increase in productivity.

In the work-related context economic incentives (i.e., compensation) are

considered to be the central reward for performance and a very salient

motivator of behavior. However, even here social incentives can

influence the benefits and efforts, shaping individuals’ motivation.

Moreover, social incentives can interact with economic incentives,

shaping individuals’ behavior. In certain cases, especially when the social

group consists of peers, the existence of a social incentive can

undermine the expected positive effect of economic incentives on

workers' effort and productivity. For example, evidence from personnel

data among farm-workers that worked together to introduce a piece-rate

payment scheme, in which more effort invested by a worker reduced the

average payment of other workers, led to decreased workers’ efforts

(Bandiera, Barankay, & Rasul, 2005).

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Individual Differences.

People differ in the extent to which their behavior is influenced by

different social incentives. Such differences can be attributed to

demographic factors such as gender or age, and other individual

characteristics such as specific traits.

In his general classification of social rewards, Buss (1983) suggested two

categories of social incentives – process incentives and content

incentives. Process incentives concern the mere presence of others,

receiving attention from others, receiving a response from others, as well

as other people initiating interpersonal contact. Content incentives

concern receiving deference, praise, sympathy, and affection from

others. Gender differences may exist in content incentives (Buss, 1983).

For example, some research indicates that women may value sympathy

more than men. Individual differences in certain traits may further

explain the extent to which some forms of social incentives would be

viewed as rewarding. For example, for shy people, attention from others

would be less rewarding, and for people with low self-esteem, praise and

affection would be more rewarding (Buss, 1983).

From a developmental perspective, the Theory of Social Incentives

(Veroff & Veroff, 1980) suggested that social incentives are general

social goals that develop from early infancy, throughout childhood and

adulthood. Thus, one's social incentives (i.e., goals) change throughout a

lifespan, moving from attachment, assertiveness, relatedness,

belongingness, and integrity. The Theory of Social Incentives argues that

while some general categories of social incentives exist, the specific

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social incentives that motivate behavior vary substantially between

individuals. It is important to note that this developmental framework is

more closely related to social motives or goals rather than rewards for

behavior (Buss, 1983).

Conclusion

Social incentives are interpersonal rewards that motivate human

behavior. The rewarding nature of social incentives is based on the

fundamental human motive to seek affiliation with other humans. Social

incentives drive human behavior in interpersonal and public contests,

usually motivating socially valued behavior to gain non-monetary

rewards, such as affiliating with others, creating or maintaining a

favorable social image, and being socially accepted.

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