Paying the Price of Sweetening Your Donation: Evidence from a Natural Field Experiment

Using a natural field experiment in a recreational site, a public good almost fully dependent on voluntary donations, the authors explored the crowding-out effect of gift rewards. First, they investigated whether receiving a map in appreciation of a donation crowded out prosocial behavior and found no significant effect of giving the map. Second, they explored the effect of adding the map to a treatment designed to increase donations. Interestingly, when the gift was combined with their attempt to trigger reputational and self image motives, the probability of donating decreased significantly, compared to the social reference treatment alone.

In this paper, the authors show how a treatment intended to trigger higher donations by appealing to reputational motives is crowded out by extrinsic incentives. Even when applied in isolation, a gift in appreciation of prosocial behavior is not a suitable motivation for increasing donations. In both these cases, if we take into account the cost of the map, we end up with a vertical or negatively sloped supply curve, as predicted in Bénabou and Tirol’s (2006) model: the free map results in a loss to the park. Our results contradict Falk (2007) who found a significant effect of gift giving. One explanation for this difference could be that motivational crowding out is larger when the intentions of gift giving are more clearly attributable to a particular “culprit” (i.e., the national park authorities), which is clearer in our paper, compared to Falk (2007).