ICES Brown Bag for February 23

Events, Seminars | February 13, 2017

Join us for an ICES Brown Bag Lecture, featuring Luigi Butera.

Dr. Butera, of the University of Chicago, will discuss his paper (co-authored with Robert Metcalfe and Dmitry Taubinsky) The Welfare Effect of Social Recognition: A Field Experiment With the YMCA (Abstract). The talk will take place on Thursday, February 23rd, from 12:00 to 1:00pm, in room 5075 of the Metropolitan Building, Arlington campus.

Coffee and dessert will be provided.

Please visit the Brown Bag Schedule to learn more about the Brown Bag series.

Abstract

People respond strongly to the prospect of receiving positive or negative social recognition. As a result, social recognition is often used as a nudge to induce desirable behavioral changes. While social image nudges may be cost-effective compared to other forms of incentives, such as monetary incentives, little is known about their effect on the welfare of those who are nudged. We ran a field experiment with the YMCA where we incentivized people to attend the local YMCA gym for a month through monetary incentives – either benefitting the participants or a charity – and through social recognition of their effort. We elicit people’s preferences for social image and observe how it impacts their actual attendance. We find that our social recognition nudge increases average attendance by 24%, and that charity incentives are as effective as personal incentives when coupled with social recognition. However, people largely overestimate ex-ante their ability to benefit from social recognition, resulting in significant average welfare losses. Overall we show that social image nudges, while very cost-effective, they may be a negative sum game if people’s biases are not taken into account when nudges are designed.

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