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Intrinsic and Extrinsic Motivation

date Date: January 1, 2003
date Author(s): Jean Tirole, Roland Benabou
date Affiliation: Universite de Toulouse I-Princeton University

A central tenet in 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 and 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 empowrement, help and excuses on motivation as well as situations of ego bashing reflecting a battle of dominance within a relationship.


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