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Corporate philanthropy and productivity: evidence from an online real effort experiment

Corporate philanthropy and productivity: evidence from an online real effort experiment
Corporate philanthropy and productivity: evidence from an online real effort experiment
Contributing to a social cause can be an important driver for workers in the public and nonprofit sectors as well as in firms that engage in corporate philanthropy or other corporate social responsibility policies. This paper compares the effectiveness of a social incentive that takes the form of a donation received by a charity of the subject’s choice to a financial incentive. We find that social incentives lead to a 13% rise in productivity, regardless of their form (lump sum or related to performance) or strength. The response is strong for subjects with low initial productivity (30%), whereas high-productivity subjects do not respond. When subjects can choose the mix of incentives, half sacrifice some of their private compensation to increase social compensation, with women more likely to do so than men. Furthermore, offering subjects some discretion in choosing their own payment schemes leads to a substantial improvement in performance. Comparing social incentives to equally costly increases in private compensation for low-productivity subjects reveals that the former are less effective in increasing productivity, but the difference is small and not statistically significant
financial incentives, social incentives, prosocial behavior, real effort experiment, corporate philanthropy, corporate social responsibility, gender
0025-1909
1795-1811
Tonin, Mirco
bd4b5fbe-5992-44cb-a702-9c768fdf9bc0
Vlassopoulos, Michael
2d557227-958c-4855-92a8-b74b398f95c7
Tonin, Mirco
bd4b5fbe-5992-44cb-a702-9c768fdf9bc0
Vlassopoulos, Michael
2d557227-958c-4855-92a8-b74b398f95c7

Tonin, Mirco and Vlassopoulos, Michael (2015) Corporate philanthropy and productivity: evidence from an online real effort experiment. Management Science, 61 (8), 1795-1811. (doi:10.1287/mnsc.2014.1985).

Record type: Article

Abstract

Contributing to a social cause can be an important driver for workers in the public and nonprofit sectors as well as in firms that engage in corporate philanthropy or other corporate social responsibility policies. This paper compares the effectiveness of a social incentive that takes the form of a donation received by a charity of the subject’s choice to a financial incentive. We find that social incentives lead to a 13% rise in productivity, regardless of their form (lump sum or related to performance) or strength. The response is strong for subjects with low initial productivity (30%), whereas high-productivity subjects do not respond. When subjects can choose the mix of incentives, half sacrifice some of their private compensation to increase social compensation, with women more likely to do so than men. Furthermore, offering subjects some discretion in choosing their own payment schemes leads to a substantial improvement in performance. Comparing social incentives to equally costly increases in private compensation for low-productivity subjects reveals that the former are less effective in increasing productivity, but the difference is small and not statistically significant

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mnsc.2014.1985 - Version of Record
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More information

Accepted/In Press date: 6 April 2014
e-pub ahead of print date: 10 December 2014
Published date: July 2015
Keywords: financial incentives, social incentives, prosocial behavior, real effort experiment, corporate philanthropy, corporate social responsibility, gender
Organisations: Economics

Identifiers

Local EPrints ID: 382781
URI: http://eprints.soton.ac.uk/id/eprint/382781
ISSN: 0025-1909
PURE UUID: 37863383-3303-4b2d-a98b-c29a73ee6cd9
ORCID for Michael Vlassopoulos: ORCID iD orcid.org/0000-0003-3683-1466

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Date deposited: 02 Nov 2015 12:15
Last modified: 15 Mar 2024 03:28

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Author: Mirco Tonin

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