Stephan Meier

Bio: Stephan Meier is an academic researcher from Columbia University. The author has contributed to research in topics: Prosocial behavior & Incentive. The author has an hindex of 50, co-authored 121 publications receiving 13598 citations. Previous affiliations of Stephan Meier include Institute for the Study of Labor & Federal Reserve Bank of Boston.

When and Why Incentives (Don't) Work to Modify Behavior

Abstract: First we discuss how extrinsic incentives may come into conflict with other motivations. For example, monetary incentives from principals may change how tasks are perceived by agents, with negative effects on behavior. In other cases, incentives might have the desired effects in the short term, but they still weaken intrinsic motivations. To put it in concrete terms, an incentive for a child to learn to read might achieve that goal in the short term, but then be counterproductive as an incentive for students to enjoy reading and seek it out over their lifetimes. Next we examine the research literature on three important examples in which monetary incentives have been used in a nonemployment context to foster the desired behavior: education; increasing contributions to public goods; and helping people change their lifestyles, particularly with regard to smoking and exercise. The conclusion sums up some lessons on when extrinsic incentives are more or less likely to alter such behaviors in the desired directions.

Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially

Abstract: This paper examines image motivation - the desire to be liked and well-regarded by others - as a driver in prosocial behavior (doing good), and asks whether extrinsic monetary incentives (doing well) have a detrimental effect on prosocial behavior due to crowding out of image motivation.By definition, image depends on one's behavior being visible to other people. Using this unique property we show that image is indeed an important part of the motivation to behave prosocially. Moreover, we show that extrinsic incentives interact with image motivation and are therefore less effective in public than in private. Together, these results imply that image motivation is crowded out by monetary incentives; this means that monetary incentives are more likely to be counterproductive for public prosocial activities than for private ones.

Doing Good or Doing Well? Image Motivation and Monetary Incentives in Behaving Prosocially

Abstract: Most charitable organizations depend on private contributions, in the form of monetary gifts, volunteer efforts, or other tangible contributions, such as blood donations. The magnitude of private contributions is impressive?in the United States 89 percent of households donate, aver? aging $1,620 per year, and 44 percent of US adults volunteer the equivalent of 9 million full time jobs (Independent Sector 2001). This level of prosocial behavior is striking in light of the economic incentive to free-ride in the provision of public goods. In order to elicit contributions, charitable organizations use many creative efforts to incentivize voluntary giving: wrist bands, thank-you gifts, organized walks, concerts, and advertised donors lists. The government also helps promote charitable giving by offering tax breaks for donations. The various types of charitable contributions and the many real-life ways of soliciting such donations suggest that there may be different motives for individuals to behave prosocially. These motives are roughly divisible into three broad categories: intrinsic, extrinsic, and image motiva? tion. Intrinsic motivation is the value of giving per se, represented by private preferences for others' well-being, such as pure altruism or other forms of prosocial preferences (for surveys, see Ernst Fehr and Klaus Schmidt 2003; Meier 2007). Extrinsic motivation is any material reward or benefit associated with giving, such as thank-you gestures and tax breaks. Image motivation, or signaling motivation, refers to an individual's tendency to be motivated partly by others' percep? tions. Image motivation therefore captures the rule of opinion in utility, i.e., the desire to be liked and respected by others and by one's self. If individuals are looking to gain social approval of their behavior, they should try to signal traits defined as "good" based on the community's norms

Social Comparisons and Pro-social Behavior: Testing "Conditional Cooperation" in a Field Experiment

Abstract: People behave pro-socially in a wide variety of situations that standard economic theory is unable to explain. Social comparison is one explanation for such pro-social behavior: people contribute if others contribute or cooperate as well. This paper tests social comparison in a field experiment at the University of Zurich. Each semester every single student has to decide whether he or she wants to contribute to two Social Funds. We provided 2500 randomly selected students with information about the average behavior of the student population. Some received the information that a high percentage of the student population contributed, while others received the information that a relatively low percentage contributed. The results show that people behave pro-socially, conditional on others. The more others cooperate, the more one is inclined to do so as well. The type of person is important. We are able to fix the i?½typesi?½ by looking at revealed past behavior. Some persons seem to care more about the pro-social behavior of others, while other i?½typesi?½ are not affected by the average behavior of the reference group.

Present-Biased Preferences and Credit Card Borrowing

Abstract: Some individuals borrow extensively on their credit cards. This paper tests whether present-biased time preferences correlate with credit card borrowing. In a field study, we elicit individual time preferences with incentivized choice experiments, and match resulting time preference measures to individual credit reports and annual tax returns. The results indicate that present-biased individuals are more likely to have credit card debt, and have significantly higher amounts of credit card debt, controlling for disposable income, other socio-demographics, and credit constraints.

What Can Economists Learn from Happiness Research

Abstract: Over the past few years, there has been a steadily increasing interest on the part of economists in happiness research. We argue that reported subjective well-being is a satisfactory empirical approximation to individual utility and that happiness research is able to contribute important insights for economics. We report how the economic variables income, unemployment and inflation affect happiness as well as how institutional factors, in particular the type of democracy and the extent of government decentralization, systematically influence how satisfied individuals are with their life. We discuss some of the consequences for economic policy and for economic theory.

What can economists learn from happiness research

Abstract: In recent years, there has been a steadily increasing interest on the part of economists in happiness research. We argue that reported subjective well-being is a satisfactory empirical approximation to individual utility and that happiness research is able to contribute important insights for economics. We report how the economic variables income, unemployment and inflation affect happiness as well as how institutional factors, in particular the type of democracy and the extent of government decentralization, systematically influence how satisfied individuals are with their life. We discuss some of the consequences for economic policy and for economic theory.

The Economic Importance of Financial Literacy: Theory and Evidence

Abstract: This paper undertakes an assessment of a rapidly growing body of economic research on financial literacy. We start with an overview of theoretical research which casts financial knowledge as a form of investment in human capital. Endogenizing financial knowledge has important implications for welfare as well as policies intended to enhance levels of financial knowledge in the larger population. Next, we draw on recent surveys to establish how much (or how little) people know and identify the least financially savvy population subgroups. This is followed by an examination of the impact of financial literacy on economic decision-making in the United States and elsewhere. While the literature is still young, conclusions may be drawn about the effects and consequences of financial illiteracy and what works to remedy these gaps. A final section offers thoughts on what remains to be learned if researchers are to better inform theoretical and empirical models as well as public policy.

Incentives and Prosocial Behavior

Abstract: We develop a theory of prosocial behavior that combines heterogeneity in individual altruism and greed with concerns for social reputation or self-respect. Rewards or punishments (whether material or imagerelated) create doubt about the true motive for which good deeds are performed and this “overjustification effect” can induce a partial or even net crowding out of prosocial behavior by extrinsic incentives. We also identify the settings that are conducive to multiple social norms and more generally those that make individual actions complements or substitutes, which we show depends on whether stigma or honor is (endogenously) the dominant reputational concern. Finally, we analyze the socially optimal level of incentives and how monopolistic or competitive sponsors depart from it. Sponsor competition is shown to potentially reduce social welfare.