Social Incentives Matter: Evidence from an Online Real Effort Experiment

Contributing to a social cause can be an important driver for workers in the public and non-profit sector as well as in firms that engage in Corporate Social Responsibility activities. This paper compares the effectiveness of social incentives to financial incentives using an online real effort experiment. We find that social incentives lead to a 20% rise in productivity, regardless of their form (lump sum or related to performance) or strength. When subjects can choose the mix of incentives half sacrifice some of their private compensation to increase social compensation, with women more likely than men. Furthermore, social incentives do not attract less productive subjects, nor subjects that respond more to exogenously imposed social incentives. Our calculations suggest that a dollar spent on social incentives is equivalent to increasing private compensation by at least half a dollar

Sustainable Business Practices - An Environmental Economics Perspectives

In this chapter, we will discuss corporate social responsibility (CSR) from an environmental economics perspective. The discussion is based on existing research and aims to illuminate some concepts and create an explanatory framework for understanding the corporate behavior referred to as CSR and especially the environmental responsibility dimension. We argue that a theory about CSR would have to include trade-offs between personal taste and values, social norms, and market imperfections. The challenge with progressing academic research about CSR would be improving environmental accounting frameworks, both at the national level and at firm level. The system of double bookkeeping needs to be accompanied by environmental, social, and material flows accounts in a more detailed manner than what we see today. If not, any proposed theory about CSR would run the risk of being moot as it would be impossible to put it to the test