Will There Be Blood? Incentives and Displacement Effects in Pro-Social Behavior

[Clark]

http://www-2.rotman.utoronto.ca/facBios/file/LMS_AEJPol_2011_0037_Final.pdf

Will There Be Blood? Incentives and Displacement Effects in Pro-Social Behavior
Nicola Lacetera
University of Toronto
Mario Macis
Johns Hopkins University 
and IZA
Robert Slonim
University of Sydney 
and IZA
March 22, 2011

Abstract
We present evidence from nearly 14,000 American Red Cross blood drives and from a natural field experiment
showing that economic incentives have a positive effect  on blood donations without increasing the fraction of
donors who are ineligible to donate. The effect increases with the incentive’s economic value. However, a
substantial proportion of the increase in donations is explained by donors leaving neighboring drives without
incentives to attend drives with incentives; this displacement also increases with the economic value of the
incentive. We conclude that extrinsic incentives stimulate pro-social behavior, but unless displacement effects are
considered, the effect may be overestimated.