Why High Incentives Cause Repugnance, by Robert Stüber

 Here's a nice experiment in the EJ:

Robert Stüber,Why High Incentives Cause Repugnance: a Framed Field Experiment, The Economic Journal, 2024;, ueae018, https://doi-org.stanford.idm.oclc.org/10.1093/ej/ueae018 

"Abstract: Why are high monetary payments prohibited for certain goods, thereby causing shortages in their supply? I conduct (i) a framed field experiment with a general population sample and (ii) a survey experiment with this sample and with ethics committees. In the experiment, participants can prohibit others from being offered money to register as stem-cell donors. I document that, whereas the majority of participants do not respond to changes in the incentives (63%) or become more in favour of the offer with higher incentives (20%), a minority of 17% prohibit high incentives. I show that this minority wants to protect individuals who are persuaded by high incentives. I also show that a lottery scheme reduces their objections to high incentives. Finally, I document that the public is much more supportive of high incentives than are ethics committees."

"In the experiment, participants can prohibit a transaction that involves another person signing up as a potential stem-cell or bone-marrow donor for money.1 Participants initially make a decision for two distinct amounts of compensation: one low (€10) and one high (€500). The main outcome is participants’ willingness to pay for prohibiting or permitting the offer. I find that the majority of participants (63%) do not respond to changes in the incentives or become more in favour of the offer with higher payment (20%). A clear minority (17%) reveal a stronger preference for preventing the offer when the payment is €500 rather than €10. This finding is mirrored in a second outcome, in which separate participants make simple binary decisions to prohibit the offer or not.

"Why do some participants want to prevent high monetary incentives for signing up? I answer this question by randomly assigning participants to different treatments. In the main treatment, Reservation Price, participants again decide whether to permit an offer of €500 for becoming a stem-cell donor. However, they know that, even if they permit the offer, the offer will be made only if the individual potentially receiving the offer agrees to sign up as a donor for €10 in an independent decision made beforehand. If the individual is not willing to sign up for €10, no offer is made. Put differently, the treatment ensures that the €500 offer is made only to individuals with reservation prices of €10 or less. The offer therefore cannot attract individuals with high reservation prices. The treatment drastically reduces the resistance of individuals who prefer low incentives: the median person who was previously willing to pay €2.50 to prevent the €500 offer is now willing to pay €1.50 to permit it. "