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The Welfare Effects of Social Recognition

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Room NAB.2.04, New Academic Building

54 Lincoln's Inn Fields

London

WC2A 3LJ

United Kingdom

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Dr Rob Metcalfe will present his latest research on The Welfare Effects of Social Recognition: Theory and Evidence from a Field Experiment with the YMCA.

A growing body of empirical work shows that social recognition can meaningfully influence individuals’ choices. This paper investigates whether social recognition is a socially efficient lever for influencing individuals’ decisions. Theoretically, we show that whether social recognition is more efficient than financial incentives depends on the shape of the social recognition utility function, which determines whether social signaling is a positive-sum, negative-sum, or zero-sum game. To quantify the theoretical findings, we report results from a novel field experiment on promoting attendance to the YMCA. We quantify the impact of social recognition on attendance and elicit people’s willingness to pay for social recognition in different future states of the world. We find that social recognition increases YMCA attendance by 23% over a one-month period. We then estimate people’s willingness to pay to be recognized at varying levels of attendance, and find that social signaling is a moderately positive-sum game. Unlike previous attempts at evaluating “nudges”, we are able to generate our welfare estimates using non-parametric methods that do not rely on the assumption that individuals hold rational expectations about their future behavior. Our experimental framework provides a general template for robustly evaluating the welfare effects of non-financial policy levers.

Robert Metcalfe is an Assistant Professor in Markets, Public Policy, and Law at the Questrom School of Business, Boston University. He was previously a Postdoctoral Research Scholar in Economics at the University of Chicago and is a visiting fellow at the University of Oxford’s Smith School. Rob's research lies within applied microeconomics, with a focus on energy markets, transportation, firm and labor productivity, digital platforms, and regulation. Rob’s research has been featured in the Harvard Business Review, The Wall Street Journal and the Financial Times, and has conducted research with many large organisations such as Uber, Virgin Atlantic Airlines, the YMCA, Opower, British Gas, Sempra Energy. He completed his M.Sc. and Ph.D. at the London School of Economics and Imperial College London, respectively. You can read more about his research on his website https://www.rmetcalfe.net/

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Room NAB.2.04, New Academic Building

54 Lincoln's Inn Fields

London

WC2A 3LJ

United Kingdom

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