DP9477 Motivating Knowledge Agents: Can Incentive Pay Overcome Social Distance?

Author(s): Erlend Berg, Maitreesh Ghatak, R Manjula, D Rajasekhar, Sanchari Roy
Publication Date: May 2013
Keyword(s): incentive pay, information constraints, knowledge transmission, public services, social proximity
JEL(s): C93, D83, I38, M52, O15, Z13
Programme Areas: Public Economics, Development Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=9477

This paper studies the interaction of incentive pay and social distance in the dissemination of information. We analyse theoretically as well as empirically the effect of incentive pay when agents have pro-social objectives, but also preferences over dealing with one social group relative to another. In a randomised field experiment undertaken across 151 villages in South India, local agents were hired to spread information about a public health insurance programme. Relative to flat pay, incentive pay improves knowledge transmission to households that are socially distant from the agent, but not to households similar to the agent.