Intrinsic and Extrinsic Motivation

Abstract

A central tenet of economics is that individuals respond to incentives. For psychologists and sociologists, in contrast, rewards and punishments are often counterproductive, because they undermine "intrinsic motivation". We reconcile these two views, showing how performance incentives offered by an informed principal (manager, teacher, parent) can adversely impact an agent's (worker, child) perception of the task, or of his own abilities. Incentives are then only weak reinforcers in the short run, and negative reinforcers in the long run. We also study the effects of empowerment, help and excuses on motivation, as well as situations of ego bashing reflecting a battle for dominance within a relationship.

Crowding Out Intrinsic Motivation in the Public Sector

“…Taking the view that the public sector offers more opportunities to carry out prosocial actions, these stylized facts are consistent with the ample evidence in the literature suggesting the presence of important gender differences in prosocial motivation (Croson and Gneezy 2009). As Benabou and Tirole (2006) argue, if indeed women assign higher weights on prosocial reputational concerns than men, then women are more likely to contribute more prosocial actions in the absence of extrinsic rewards and women will also be more likely respond more negatively than men to extrinsic rewards. When studying the willingness to donate blood, Mellstrom and Johannesson (2008) find similar evidence in that in the absence of monetary incentives women donate more blood than men do.…”

“…Norm-based motives are generated by a desire to pursue the public interest; they include patriotism, civic duty, 4 See Frey and Jegen (2001) for a literature survey on motivation crowding theory. Studies that examine the link between extrinsic rewards and individuals' propensity to act prosocially include Frey, Oberholzer-Gee, and Eichenberger (1996), Frey and Oberholzer-Gee (1997), Rustichini (2000a, 2000b), Benabou and Tirole (2006), and Ariely, Bracha and Meier (2009). and a sense of loyalty to the government. Affective motives refer to behavior motivated by emotional responses to different social contexts and they are characterized by a desire to help others.…”

“…To formalize these arguments, we borrow from Benabou and Tirole (2006) (hereafter BT) to provide a simple theoretical framework. 5 We consider the behavior of agents who choose to work in the public sector.…”

“…Types in the private sector for whom U i;G U i;P will move to the public sector; types in the public sector for whom U i;G , U i;P will move to the private sector. Over time, therefore, types will separate between sectors: those (referred to as ''the highly intrinsically motivated'') for whom See also Benabou and Tirole (2003).…”

Paying with Self-Chosen Goals: Incentives and Gender Differences

“…5 The challenge is further complicated by the fact that workers themselves have differing abilities and interact with each other. If the manager sets a goal based on his perception of each worker's ability, then a goal becomes a signal which can itself be an extra motivator if the signal is good enough, as in Benabou and Tirole (2003). However, it can also be discouraging if it is low relative to the signal received by other workers, or to one's expectations about one's own ability.…”