Trust as a Signal of a Social Norm and the Hidden Costs of Incentive Schemes

By Dirk Sliwka. Social Science Research Network, 2006

442 citations recorded by the source corpus.

An explanation for motivation crowding-out phenomena is developed in a social preferences framework. Besides selfish and fair or altruistic types a third type of agents is introduced: These "conformists" have social preferences if they believe that sufficiently many of the others do too. When there is asymmetric information about the distribution of preferences (the "social norm"), the incentive scheme offered or autonomy granted can reveal a principal's beliefs about that norm. High-powered incentives may crowd out motivation as pessimism about the norm is conveyed. But by choosing fixed wages or granting autonomy the principal may signal trust in a favorable social norm.

Subfields: Demography, General Decision Sciences, Safety Research

View Paper: https://www.semanticscholar.org/paper/d2ca9a75d2a0615c797ef6ce4f7b956696f1ac48

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Citations in the corpus

International business responses to institutional voids (2017, unknown): “1Signaling explains behavior under information asymmetry, and is used by one party to indicate its level of credibility to another (Spence, 1973, 2002; Sliwka, 2007).”
Public Trust, the Law, and Financial Investment (2009, background): “13 See also Sliwka (2007). 14 In the analysis that follows, we also consider intermediate cases, in which the distributions have convex and concave regions.”
Employee Recognition and Performance: A Field Experiment (2016, background): “If workers have a preference for conformity (for example, if they want to behave like others or to adhere to a group norm as in Bernheim, 1994, Sliwka, 2007, Fischer and Huddart, 2008, and Chen et al., 2010), this coarse rank information should increase effort of non-recipients and decrease effort…”
Financial Incentives as Signals: Experimental Evidence from the Recruitment of Village Promoters in Uganda (2019, background): “First, it contributes to the existing research on the role of financial incentives as signals, which has so far been mainly theoretical (Benabou and Tirole 2003; Sliwka 2007; Godes and Mayzlin 2012).”
Screening, Competition, and Job Design: Economic Origins of Good Jobs (2012, unknown): “…on the impact of control and extrinsic incentives on intrinsic motivation and voluntary cooperation (for example, Frey 1997, Gneezy and Rustichini 2000, Frey and Jegen 2001, Fehr and Rockenbach 2003, Benabou and Tirole 2006, Falk and Kosfeld 2006, Sliwka 2007, Ellingsen and Johannesson 2008).”
Trademarks and Venture Capital Valuation (2014, unknown): “Prior research on signaling suggests that the strength and value of a signal is not constant but instead depends on the environment (Connely et al., 2011; Karamanos, 2003; Sliwka, 2007), the expectations of the receiver, the ability of the receiver to interpret the signal (Fischer and Reuber, 2007; ”
Signaling Theory: A Review and Assessment (2011, background): “When a signal is interpreted by others in a particular way, an individual who is unsure about how to interpret the signal may look to imitation as a means of decision making (Sliwka, 2007).”
Behavioral Agency Theory (2015, background): “This means that, in Steel and König’s revised expectancy model, the valence that an agent attaches to k takes into account risk and uncertainty, as well as being discounted for any time delay between the occurrence of act i and outcome k. Positive agency theory places less emphasis on the objective ”