Incentives and Intertemporal Behavioral Spillovers: A Two-Period Experiment on Charitable Giving

Abstract

We test whether and, if so, how incentives to promote pro-social behavior affect the extent to which it spills over to subsequent charitable giving. To do so, we conduct a two-period artefactual field experiment to study repeated donation decisions of more than 700 participants. We vary how participants' first pro-social behavior is incentivized by a wide range of fundraising interventions ranging from soft to hard paternalism. Our design allows us to decompose spillover effects into a pure spillover effect, which identifies the impact of previous pro-social behavior on subsequent donation decisions and a crowding effect, which captures the extent to which the spillover effects are affected by the incentives exerted on the previous pro-social behavior. We find evidence for negative spillover effects. Participants donate less if they completed a pro-social task prior to the donation decision. Most importantly, we find that the spillover effects depend on how the initial pro-social behavior has been incentivized. Especially participants who are incentivized to donate through social comparisons are more willing to give to charity thereafter compared to participants whose initial prosocial behavior is incentivized by monetary rewards. The variations in spillover effects are driven by participants' perceived external pressure in the first pro-social decision.