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The effect of charitable giving on workers’ performance. Experimental evidence

Author

Listed:
  • Gary Charness

    (University of California at Santa Barbara)

  • Ramón Cobo-Reyes

    (University of Exeter Business School.)

  • Angela Sanchez

    (University of Exeter Business School.)

Abstract
We investigate how donating worker earnings for voluntary extra work, a form of corporate social responsibility, affects worker behavior. In our experiment, participants performed a realeffort task. Subjects were asked to enter real data (from an unrelated experiment) for 60 minutes and were paid on a piece-rate basis. After the 60 minutes, they were then asked if they wished to stay for up to another 30 minutes; we varied the piece-rate pay and whether it was paid to the worker or to a charity. Our results show that when the piece rate paid is relatively high, workers do more extra work when they are directly paid this piece rate as compared to when their earnings are instead paid to a charity. However, with low piece rates, this relationship reverses and workers are much more motivated when the money is donated to a charity instead of when it is paid directly to them. This approach is potentially a win-win outcome for at least firms and charities. We also find that when we only pay a small amount to workers, their behavior differs only modestly from the situation in which we do not pay at all.

Suggested Citation

  • Gary Charness & Ramón Cobo-Reyes & Angela Sanchez, 2014. "The effect of charitable giving on workers’ performance. Experimental evidence," ThE Papers 14/06, Department of Economic Theory and Economic History of the University of Granada..
    • Handle: RePEc:gra:wpaper:14/06
    as

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    File URL: http://www.ugr.es/~teoriahe/RePEc/gra/wpaper/thepapers14_06.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    labor market; gift exchange-game; delegation; responsibility-allevietion; experiments.;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D29 - Microeconomics - - Production and Organizations - - - Other
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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