Several years ago the AARP asked lawyers to participate in a program where they would offer their services to needy employees for a discounted price of $30/hour. No dice. When the program manager instead asked if they’d offer their services for free, the lawyers overwhelmingly said they would participate.

Ariely and Heyman conducted the following experiment. Subjects were asked to use a computer to drag circles from one side of the screen into a square.  They were instructed to drag as many circles as they could in 5 minutes (Ariely notes that this is very boring).

The rewards given for the task were: $5, $0.50, and zero

  • $5: 159 circles
  • $0.50: 101 circles
  • Zero: 168 circles
  • Participants worked harder under non-monetary social norms than for payment!

Market norms drive out social norms.

To follow up on the experiment, they ran it again, this time with the rewards of a box of Godiva chocolates (worth ~$5), a Snickers bar (worth ~$1), and zero

  • $5 (Godiva): 169 circles
  • $0.50 (Snickers): 162 circles
  • Zero: 168 circles

Conclusion: Small gifts don’t constitute a market norm, and keep things in the social realm.

One more variation: The experimenters described the gifts as a $5 box of chocolates and a $0.50 candy bar. The results were the same as with the cash rewards. They reacted to explicitly priced gifts in exactly the same way they reacted to cash.

"People are willing to work free, and they are willing to work for a reasonable wage, but offer them just a small payment and they will walk away."

 

 

via – Predictably Irrational: The Hidden Forces That Shape Our Decisions by Dan Ariely