When Incentives Backfire: Spillover Effects in Food Choice
We study the spillover effects of incentives on an action. We model them as having both a positive and negative effect on the likelihood of undertaking an action and then run a field experiment designed to identify them in which we incentivize students’ choices of grapes over cookies. We find that, while the net direct effect of incentives is positive, there are both positive and negative non-linear spillover effects. The net spillover effect of incentives is initially positive but becomes negative when more than 70% of the group is incentivized.