Incentives and prosocial discomfort: A laboratory experiment

We conducted a within-subject laboratory experiment in which participants decided whether to experience physical discomfort for charity, with or without additional personal compensation. Acceptance decreased with greater discomfort and increased with both larger charitable donations and personal payments. We show that private monetary incentives and prosocial benefits interact in a less-than-additive way: personal compensation raises participation but attenuates the marginal impact of charitable donations, making the combined impact of private and social rewards smaller than the sum of their separate effects. We also find suggestive evidence that the sequencing of compensated and uncompensated choices may change the responsiveness to charitable benefits. Overall, our results indicate that context, especially the presence (and timing) of private rewards, can affect the relationship between incentives and prosocial behavior. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.