When and Why Incentives (Don't) Work to Modify Behavior

  title={When and Why Incentives (Don't) Work to Modify Behavior},
  author={Uri Gneezy and Stephan Meier and Pedro Rey-Biel},
  journal={Journal of Economic Perspectives},
First we discuss how extrinsic incentives may come into conflict with other motivations. For example, monetary incentives from principals may change how tasks are perceived by agents, with negative effects on behavior. In other cases, incentives might have the desired effects in the short term, but they still weaken intrinsic motivations. To put it in concrete terms, an incentive for a child to learn to read might achieve that goal in the short term, but then be counterproductive as an… 

Are Non-Contingent Incentives More Effective in Motivating New Behavior? Evidence from the Field

Companies and policymakers are increasingly relying on economic incentives as a means of promoting new habits and changing people’s behavior. For example, workplace wellness programs use incentives

When Does Altruism Trump Self-Interest? The Moderating Role of Affect in Extrinsic Incentives

Extensive use of incentives in practice suggests that they play a key role in motivating behavior. However, conflicting findings have emerged about the effectiveness of various types of incentives

Prosocial Incentives Change Willingness to Compete in Work Tasks: The Role of Gender and Performance

This study examines the effects of prosocial incentives, where charities benefit from an individual’s efforts, on workers’ willingness to compete in a work task in an experimental setting. Counter to

What Makes Law to Change Behavior? An Experimental Study

Abstract The use of mild laws to affect people’s behavior is pervasive – from environmental regulation to tort law – but little is known about how the law changes human behavior and social outcomes

When Do Financial Incentives Reduce Intrinsic Motivation? Comparing Behaviors Studied in Psychological and Economic Literatures

  • Marianne PrombergerT. Marteau
  • Psychology
    Health psychology : official journal of the Division of Health Psychology, American Psychological Association
  • 2013
The existing evidence does not warrant a priori predictions that an undermining effect would be found for health-related behaviors, and existing evidence to identify potential moderators of the effect is reviewed.

Incentives Activate a Control Mind-Set: Good for Deliberate Behaviors, Bad for Habit Performance

Incentives have dual effects in consumer settings: The benefits on deliberate consumer purchase and performance are well known. But the detrimental effects on habit performance are less recognized.

Crowding-Out Effects of Laws, Policies and Incentives on Compliant Behaviour

  • C. Folmer
  • Economics
    The Cambridge Handbook of Compliance
  • 2021
Laws, policies, and incentives provide people with extrinsic reasons to engage in desired behaviours. But by doing so, they may attenuate or displace people’s intrinsic reasons for complying. In this

On the Failure to Seek Beneficial Information: The Problem with Inconspicuous Incentives

Managers and policymakers regularly rely on incentives to encourage valued behaviors. While often successful, there are also notable and surprising examples of their ineffectiveness. Why? Perhaps



When Altruism Trumps Self-Interest: The Effect of Donation-Incentives on Motivation

People are often asked to complete tasks for small incentives. For example, researchers in a university setting frequently ask students to participate in studies in exchange for a small compensation.

Paying Respect

W hy do people work? Economic theory generally, and the principal– agent model specifically, emphasize the role of material incentives. The standard assumption is that people work hard only if they

Another Hidden Cost of Incentives: The Detrimental Effect on Norm Enforcement

The results of the experiment show that private incentives for contributors can reduce the effectiveness of the norm enforcement mechanism: Free riders are punished less harshly in the treatment with incentives, and as a consequence, average contributions to the public good are no higher than without incentives.

Will There Be Blood? Incentives and Substitution Effects in Pro-Social Behavior

We examine how economic incentives affect pro-social behavior through the analysis of a unique dataset with information on more than 14,000 American Red Cross blood drives. Our findings are

Using Money to Motivate Both ‘Saints’ and ‘Sinners’: A Field Experiment on Motivational Crowding‐Out

Economists recognize that monetary incentives can backfire through the crowding-out of moral and social motivations leading to an overall decrease of the desired behavior. We implement a field

The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out

Twenty-six years ago, Richard M. Titmuss (1970) claimed that monetary compensation tends to undermine an individual’s sense of civic duty. He illustrated his claim with blood donations, contending

Incentives to Exercise

It appears that providing financial incentive to attend the gym regularly for a month serves as a catalyst to get some people past the threshold of actually getting started with an exercise regimen, particularly in the area of health.

The effects of extrinsic incentives on respondent behaviour in contingent valuation studies

In contingent valuation studies to assess the economic value of environmental goods, respondents are often given small presents or money amounts at the beginning of the interview to compensate them

Incentives, Commitments and Habit Formation in Exercise: Evidence from a Field Experiment with Workers at a Fortune-500 Company

Financial incentives have been shown to have strong positive short‐run effects for problematic health behaviors, but the effects often disappear once incentive programs end. This paper analyzes the

Behavioral Economics and Psychology of Incentives

Monetary incentives can backfire while nonstandard interventions, such as framing, can be effective in influencing behavior. I review the empirical evidence on these two sets of anomalies. Paying for