Opting-in to Prosocial Incentives

Daniel  Schwartz; Elizabeth A. Keenan; Alex  Imas; Ayelet  Gneezy

Article | Organizational Behavior and Human Decision Processes

Opting-in to Prosocial Incentives

by Daniel Schwartz, Elizabeth A. Keenan, Alex Imas and Ayelet Gneezy

Abstract

The design of effective incentive schemes that are both successful in motivating employees and keeping down costs is of critical importance. Research has demonstrated that prosocial incentives, where individuals’ effort benefits a charitable organization, can sometimes be more effective than standard monetary incentives. However, most research has focused on the intensive margin, examining effort conditional on participation in the activity. We examine the effectiveness of standard and prosocial incentives on the extensive margin, corresponding to people’s decisions to opt-in to an incentivized activity. In addition, we test the effectiveness of optional prosocial incentives, where individuals can choose between keeping or donating all or part of their payment. Across four experiments that vary the type and size of incentives, we find that individuals are more likely to avoid activities that involve any prosocial incentive. Our results highlight the importance of considering the margin of decisions when designing incentive schemes.

Keywords: incentives; prosocial behavior; Behavioral economics; Field Experiments; recycling; prosocial motivation; Decision Making; Motivation and Incentives; Behavior;

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Schwartz, Daniel, Elizabeth A. Keenan, Alex Imas, and Ayelet Gneezy. "Opting-in to Prosocial Incentives." Organizational Behavior and Human Decision Processes (in press). (Pre-published online, March 6, 2019.)

Email mking@hbs.edu for a courtesy copy.

Back to the Roots (BTTR) is a start-up with a social mission to “undo food”—to reconnect people to where their food comes from. In late 2017, Back to the Roots cofounders Nikhil Arora and Alex Velez were contemplating their next move. The company had an eclectic portfolio of products, including ready-to-grow products, which included gardens in a can, and ready-to-eat products, which included cereals, and was being courted by two major players in each category. With an award-winning cereal-based snack bar in their hands, the duo was debating whether they should delve further into the ready-to-eat category. But it was a competitive space. They wondered whether they were ready to launch yet another new product and, if so, what this move would mean for their ready-to-grow product line. Which path would enable them to best achieve their growth goals?

Email mking@hbs.edu for a courtesy copy.

This Teaching Note explains the theory of the case and teaching plan for the case: Back to the Roots HBS case No. 518-073. Back to the Roots (BTTR) is a start-up with a social mission to “undo food”—to reconnect people to where their food comes from. In late 2017, Back to the Roots cofounders Nikhil Arora and Alex Velez were contemplating their next move. The company had an eclectic portfolio of products, including ready-to-grow products, which included gardens in a can, and ready-to-eat products, which included cereals, and was being courted by two major players in each category. With an award-winning cereal-based snack bar in their hands, the duo was debating whether they should delve further into the ready-to-eat category. But it was a competitive space. They wondered whether they were ready to launch yet another new product and, if so, what this move would mean for their ready-to-grow product line. Which path would enable them to best achieve their growth goals?

Case | HBS Case Collection | January 2018 (Revised May 2019)

Adeo Health Science: Turning a Product into a Brand

Elizabeth A. Keenan and Jill Avery

For decades, American parents were warned to avoid introducing potential allergens to their babies prior to their first birthday. But two influential clinical studies caused the medical establishment to radically reverse its position. Parents were now warned that delaying the introduction of these types of foods increased a baby's risk of food allergies. Adeo Health Science was ready, with patents filed for a baby food that made it simple for parents to introduce allergens. Now, the new company had to turn its product into a brand and map its go-to-market strategy, including creating a compelling value proposition, choosing a path to market that was either direct-to-consumer, through grocery retailers, or via the physician channel, and planning its marketing communications and sales strategy. As a new startup with constrained resources, the company knew its marketing decisions would make or break the new product.

Keywords: marketing; Startup; entrepreneurship; health care; consumer; consumer products; branding; brands and branding; marketing strategy; Marketing communications; Distribution; retailing; go to market strategy; Marketing; Marketing Channels; Marketing Communications; Brands and Branding; Marketing Strategy; Entrepreneurship; Health Care and Treatment; Consumer Products Industry; Health Industry; United States; North America;

Citation:

Keenan, Elizabeth A., and Jill Avery. "Adeo Health Science: Turning a Product into a Brand." Harvard Business School Case 518-065, January 2018. (Revised May 2019.) View Details

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Opting-in to Prosocial Incentives

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