Positive Peer Pressure More Effective Than Cash Incentives, Study Finds

Researchers show reputation concerns can encourage people to act for the public good. Appealing to people's desire for a good reputation is more effective than cold, hard cash, researchers at Harvard, Yale, the Federal Trade Commission and the University of California, San Diego, found in a study published June 18 in the Proceedings of the National Academy of Sciences. Their findings could be applied to everything from increasing recycling rates, reducing energy usage to cutting carbon emissions. Using enrollment of thousands of people in a California blackout prevention program as an experimental test bed, a team of researchers showed that while financial incentives boosted participation only slightly, making participation in the program observable - through the use of sign-up sheets posted in public spaces in apartment buildings - produced a three-fold increase in sign-ups. "We illustrate how making behavior that benefits society more observable can be a cheap, practical and effective way to solve read world public goods problems," said Moshe Hoffman, a postdoctoral researcher in the Department of Computer Science and Engineering at UC San Diego and one of the paper's co-authors. Using a cash incentive of $25, the utility company sponsoring the program had seen participation increase from about 3 percent to 4 percent. When researchers made people's participation more observable by posting the sign-up sheets in public spaces, participation jumped from 3 to 9 percent.