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Putting in Effort for the Benefit of All: The Role of Reward and Effort Requirements

by Magda Osman

It is probably fair to say that behaving in ways that are societally responsible and developing practices that are compliant with regulations can involve considerable effort. (Dis)incentives (e.g. bonuses, subsidies, penalties, taxes) are often the ‘go to’ ways of motivating a variety of different behaviours to act for the good, or at least not in the harm, of others. The question of my research is, if there is a better way of achieving this and what might this be?

Social psychology and behavioural economics suggest that financial inducements aren’t necessary to motivate pro-social behaviours. In fact, socially induced pressures (e.g. reputation building, social comparisons) can be extremely influential at individual and group level. Social norms act as cues to indicate socially acceptable and frequent behaviour, which helps individuals and groups make sense of uncertain social situations and identify morally acceptable actions. Comparing against others is often the easiest way to adjust to what are deemed appropriate beliefs, attitudes and actions. Inducing pro-social behaviours through social motivating forces is now part and parcel of the behavioural change enterprise (e.g. ‘nudging’) that encourages the use of these tactics in a number of social policy domains.

For instance, UK-listed companies are now required to disclose their greenhouse gas emissions and account publicly for their contributions to climate change, while restaurants in Wales and Northern Ireland must put their UK hygiene rating on display by the entrance. Nonetheless, as popular as these tactics are, analysis carried out in this project shows that they can often fail, in a variety ways and for a variety of reasons, most of which have not been documented until now (Osman et al, in press).

In this Rebuilding Macroeconomics project, we sought to focus specifically on reputation building, through the mechanism of social comparisons, as a way to motivate pro-social behaviours at group level. The aim was to empirically examine whether this tactic would be more effective at increasing cooperative effort than financial inducements alone. After all, it was Adam Smith made clear that our ‘natural desire is not only to be loved, but to be lovely; that thing which is the natural and proper object of love’.

We set up a large group study to look at how people behaved in a simple economic game, where they faced a dilemma not unlike those that occur in groups and organisations. Imagine you have to perform an effortful task (in this case a physical one – squeezing a handgrip device) and that the effort is tied to rewards which you can share all of, some of, or none of with your group (each member facing the same dilemma).

Question is: do you choose differently if you know in advance that how you choose (or how you act) to allocate the fruits of your labour will be public to your group? In our study the public information available to the group was manipulated. Some groups were told about each group member’s intended allocations (Communicated Intentions), others were told about the actual final allocations (Communicated Actions), and some groups acted as a baseline where people weren’t told about group members’ choices or actions. What we expected to find, based on previous literature, was that vehicles for reputation building (e.g. communicated intentions/actions) should promote cooperation well above baseline, where actions should speak louder than intentions.

What we’ve found is that at different levels of analysis (psychophysical, behavioural, linguistic) we see different patterns of strategic behaviour that more or less are socially oriented, and more or less meaningfully lead to pro-social outcomes. When putting in effort, we will go the extra mile more for ourselves than others (psychophysical data). Where it comes to choosing how much to contribute to a common good (behavioural data), then social forces do take effect, and we prefer to act more pro-socially when we know that our intent is under public scrutiny (Ludwiczak, Adams, and Osman, in preparation). We know that social cohesion is needed for any social forces to take effect (linguistic data), and so we signal to others that we are aligned (Adams, Ludwiczak, Sharma, Osman, in preparation). Spanning across the data levels, we see that generally there is greater investment of effort when individual benefits are guaranteed, and less effort when benefits for the self are uncertain.

What can we take from this evidence? Reputation building through public social signalling of intended actions is likely to promote socially responsible behaviours and promote regulatory compliance in social policy sectors. The important caveat is physical and mental effort is conserved where possible, so the effort exerted to achieve the stated intentions is not going to exceed what is necessary, especially when the magnitude of effort (or let’s say productivity) can be scaled down because it is distributed across groups of people. So, we can promote cooperation without relying on financial inducements alone, but what occurs is putting in just enough effort to benefit all.

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David Chester
David Chester
Jan 14, 2021

This experiment has certain applications to societies that are based on Socialism. Were the situation ideal, each participant would work as hard as possible, without regard to what the others are doing or seeing of his/her efforts. However in practice many of the participants adopt different standards to what they do---some will pretend to be working hard, some will slow down and take breaks, some will claim sickness or physical limitations of giving a full degree of output, etc., and inevitably their total results are less than the maximum possible if nobody slacked. This kind of study suggests why Socialism is not such an ideal way of human behaviour as the idealistic originators first thought. "From each according to his…

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