Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/185562 
Year of Publication: 
2018
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2018-043/I
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
Incentives based on esteem, honor and shame are increasingly popular and easy to use due to modern surveillance techniques. However, the use of shaming is controversial: critics argue that delegating punishment to a crowd can lead to mob justice and a loss of control over the size of the sanction. We use the signaling model of social behavior by Bénabou and Tirole (2011) to explore the effect of esteem-based incentives and their interaction with traditional monetary incentives. We show that esteem-based incentives can indeed lead to a loss of control by generating multiple equilibria, some of which feature high levels of stigma. Monetary and esteem incentives are interdependent. Moreover, if both types of incentives are costly to implement, the optimal incentive mix includes both instruments. In equilibrium, esteem-based incentives will be used relatively more for rare behaviors and in societies that have more heterogenous values.
Subjects: 
prosocial behavior
signaling
incentives
esteem
JEL: 
D02
H41
K42
Document Type: 
Working Paper

Files in This Item:
File
Size
2.15 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.