Feeling Good about Giving: The Benefits (and Costs) of Self-Interested Charitable Behavior



Feeling Good about Giving 14

incentivizing such behaviors. In an early demonstration, Lepper, Greene, and Nisbett (1973)
showed that rewarding children for their performance - “overjustifying” their interest -
undermined those children’s intrinsic motivation to do well. Relatedly, Titmuss (1970) argued
that paying for blood donation would undermine the social utility of the act. More generally,
“crowding out” intrinsic motivation through external incentives (see Frey & Jegen, 2001) carries
the risk that incentivizing behaviors that are socially motivated may move those behaviors from
the social realm into the economic realm, with sometimes unexpected - and detrimental - results.
Indeed, presenting people whose charitable behavior is motivated by altruistic impulses with
self-interested appeals can be alienating (Nelson, Brunel, Supphellen, & Manchanda, 2006).

What happens when social behaviors - like helping others - move into the economic
realm? In one compelling demonstration, Gneezy and Rustichini (2000a) documented the ironic
outcome that emerged when the owners of a childcare center instituted fines for parents who
were late to pick up their children. Lateness actually
increased when fines were instituted; while
most parents had made a good faith effort to arrive on time when not doing so was rude to the
owners of the center, the institution of fines made showing up late an economic matter, with
parents simply calculating the costs and benefits of tardiness. Most troubling, when the owners
discontinued the fines, parents did not revert to their earlier behavior, suggesting that when social
markets are made economic, it may be difficult to change them back. The impact of switching
from social to economic markets helps to explain some curious results in which people work
harder for no money than for low pay (Gneezy & Rustichini, 2000b). People are willing to
engage in effort such as helping others or doing favors for them for social reasons; once money
is introduced, however, people engage in cost-benefit analysis, and small amounts of money are
not sufficient to incentivize them to do the work they were willing to do for free for more



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