OB Research Seminar - Michalis Drouvelis, University of Birmingham

Corporate philanthropy has been frequently used as a tool to motivate behaviour in modern organisations. Using a large sample of subjects from online one-shot sequential public good games (N=2,376), we study the impact of social incentives on leading-by-example. We consider treatments where subjects are exogenously assigned to donate 0%, 20% or 40% of their income to a charity and find that the introduction of social incentives leads to significantly higher contributions for both leaders and followers. Additionally, we examine behaviour in endogenous treatments where subjects are asked to indicate their preferred donation amount. Our findings demonstrate that social incentives still have a positive impact on leaders’ and followers’ contribution behaviour. Part of the social incentive effects can be explained by shifts in beliefs – a result that complements existing literature, further highlighting the key role that beliefs play for leadership to be successful.