Stronger together? Team incentives and the demand for prevention

Assistant professor
Assistant Professor of Applied Economics at Erasmus School of Economy.
Thursday 20 May 2021, 14:00 - 16:00
Spoken Language
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Carlos Riumallo Herl

In this Research in Progress Seminar, Carlos Riumallo Herl explores the effect of team incentives to encourage behaviors outside the workspace.

Although team incentives are seen as powerful tools to leverage the power of social links, they have rarely been used to encourage behaviours outside firms. In this study, we partner with a micro-finance organization in El Salvador to test if we can leverage the power of existing social networks to encourage the demand for preventive healthcare services.

We randomize existing groups to receiving either team or individual incentives for attending a preventive health check-up. Against a low uptake in the control group of about 15.5%, we find that incentives more than double the demand for preventive services.

Despite the higher uncertainty of payment from an individual standpoint, team incentives are as effective as individual ones, acting through several social channels to encourage individual participation. Although individual incentives are better at screening out individuals with lower expected benefits, team incentives are a more cost-effective strategy to increase screening uptake. 

Using follow-up data, we find no evidence that the preventive check-up led to tangible benefits on individual behaviours. Overall, our results suggest that leveraging the power of existing social networks may present a new avenue for designing more cost-effective financial incentives in developing countries.

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The Research in Progress seminars are intended to provide an informal venue for presentations of ongoing research by ISS scholars and other scholars from the wider development studies community.

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