When incentives backfire: Spillover effects in food choice

Abstract

Little is known about how peers influence the impact of incentives. We investigate two mechanisms by which these effects can occur: through peers' actions and peers' incentives. In a field experiment on snack choice in the school lunchroom (choice of grapes versus cookies), we randomize who receives incentives, the fraction of peers incentivized, and whether or not it can be observed that peers' choices are incentivized. We show that, while peers' actions - picking grapes - have a positive spillover effect on children's take-up of grapes, seeing that peers are incentivized to pick grapes has a negative spillover effect on take-up. When incentivized choices are public, incentivizing all children to pick grapes has no statistically significant effect on take-up, as the negative spillover offsets the positive impacts of incentives on take-up.