TY - JOUR AU - Landry,Craig E. AU - Lange,Andreas AU - List,John A. AU - Price,Michael K. AU - Rupp,Nicholas G. TI - The Hidden Benefits of Control: Evidence from a Natural Field Experiment JF - National Bureau of Economic Research Working Paper Series VL - No. 17473 PY - 2011 Y2 - September 2011 UR - http://www.nber.org/papers/w17473 L1 - http://www.nber.org/papers/w17473.pdf N1 - Author contact info: Craig Landry East Carolina University E-Mail: landryc@ecu.edu Andreas Lange University of Hamburg Department of Economics Von Melle Park 5 20146 Hamburg Germany Tel: +49-40-42838-4035 Fax: +49-40-42838-3243 E-Mail: andreas.lange@wiso.uni-hamburg.de John List Department of Economics University of Chicago 1126 East 59th Chicago, IL 60637 Tel: 301/405-1288 Fax: 301/314-9091 E-Mail: jlist@uchicago.edu Michael Price Department of Economics Andrew Young School of Policy Studies Georgia State University P.O. Box 3992 Atlanta, GA 30302-3992 Fax: 404-413-0141 E-Mail: mprice25@gsu.edu Nicholas G. Rupp East Carolina University E-Mail: ruppn@ecu.edu AB - An important dialogue between theorists and experimentalists over the past few decades has raised the study of the interaction of psychological and economic incentives from academic curiosity to a bona fide academic field. One recent area of study within this genre that has sparked interest and debate revolves around the “hidden costs” of conditional incentives. This study overlays randomization on a naturally-occurring environment in a series of temporally-linked field experiments to advance our understanding of the economics of charity and test if such “costs” exist in the field. This approach permits us to examine why people initially give to charities, and what factors keep them committed to the cause. Several key findings emerge. First, there are hidden benefits of conditional incentives that would have gone undetected had we maintained a static theory and an experimental design that focused on short run substitution effects rather than dynamic interactions. Second, we can reject the pure altruism model of giving. Third, we find that public good provision is maximized in both the short and long run by using conditional, rather than unconditional, incentives. ER -