Information Design for Prosocial Behavior

We study the idea of information design for inducing prosocial behavior. As an example, we ground our study in the context of electricity consumption. Electricity utility providers would like to reduce the total power consumed by their residential consumer segment. Supply to this segment is often subsidized, and the saved power can be diverted to more profitable segments. Alternatively, the provider may be keen on earning carbon credits by inducing reduced consumption in this segment. The societal network in which the consumers reside may have a prevailing norm, for example, saving power is environment friendly and is considered good. Those that consume less are considered more prosocial and may derive a larger reputational benefit. How can the service provider, who is familiar with the prevailing norm and the consumption of all users, design suitable feedback signals that exploit reputation benefits to reduce net consumption? We call this a problem of information design and address this question in this paper. We consider a continuum of agents. Each agent has a different intrinsic motivation to reduce her power consumption. Each agent models the power consumption of the others via a distribution. Using this distribution, agents will anticipate their reputational benefit and choose a power consumption by trading off their own intrinsic motivation to do a prosocial action, the cost of this prosocial action and their reputation. We assume that the service provider can provide two types of quantized feedbacks of the power consumption. We study their advantages and disadvantages. For each feedback, we characterize the corresponding mean field equilibrium, using a fixed point equation. Besides computing the mean field equilibrium, we highlight that, in some situations, revealing less information can lead to more prosociality. We illustrate the result on London smart-meter data. We also introduce the notion of privacy and provide a new quantized feedback respecting agents' privacy concerns yet improving prosociality. The results of this study are not restricted to the framework of energy efficiency but are also applicable to congestion problems in road traffic and other resource sharing problems.