Erik Wengström, Professor of Economics at Lund University and Distinguished Senior Fellow at Hanken School of Economics / Helsinki Graduate School of Economics.
His research focuses primarily on how people behave in economic and financial contexts and has spanned a broad range of topics including decision-making under risk, cooperation, and communication in games. Financial incentives are frequently mentioned as a strategy to encourage prosocial and healthy behavior, such as vaccine uptake. Using large-scale randomized controlled trials, we test the effects of payments on COVID-19 vaccination uptake in Sweden. In a first study carried out in 2021, we observed that modest monetary payments of 200 Swedish kronor increased vaccination rates by 4.2 percentage points. In a second study, we find even larger effects on booster take-up. We also examine the impact of different types of financial incentives and to what degree the treatment effects are heterogeneous. Overall, the studies find clear evidence that financial incentives can trigger initial behavioral change. Yet, an extensive academic literature cautions against using financial incentives due to the risk of negative unintended consequences. Critics argue that incentives can crowd out prosocial motivations and reduce perceived safety and trust, reducing healthy behaviors when no payments are offered and eroding morals more generally. In a third study, we causally measure these unintended consequences of incentives using a unique combination of random exposure to financial incentives, population-wide administrative vaccination records, and rich survey data. We find no evidence that financial incentives negatively impact future vaccination rates, morals, trust, or perceived safety. Co-authors: Pol Campos-Mercade, Armando Meier, Florian Schneider, Stephan Meier and Devin Pope.