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

By Uri Gneezy, Stephan Meier, Pedro Rey-Biel. 2011

1,764 citations recorded by the source corpus.

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 incentive for students to enjoy reading and seek it out over their lifetimes. Next we examine the research literature on three important examples in which monetary incentives have been used in a nonemployment context to foster the desired behavior: education; increasing contributions to public goods; and helping people change their lifestyles, particularly with regard to smoking and exercise. The conclusion sums up some lessons on when extrinsic incentives are more or less likely to alter such behaviors in the desired directions.

Subfields: Economics and Econometrics, Safety Research, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/ddb13324d64b7484911a63f0eebf3e71d0f134bf

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Citations in the corpus

Best practice guidelines for abstract screening large‐evidence systematic reviews and meta‐analyses (2019, background): “As economists point out, an economic incentive is one that has the potential to change behavior.(31) Should the project have the resources, several options are available.”
Behavioral Economics of Education (2015, neutral): “Gneezy et al. (2011) survey field experiments that examine the role of extrinsic incentives in schools.”
Motivation crowding by economic incentives in conservation policy: A review of the empirical evidence (2015, neutral): “Several papers propose typologies with sub-sets of the mechanisms and different terminologies (Gawel, 2001; Frey and incentives in conservation policy: A review of the empirical evidence, Jegen, 2001; Frey and Stutzer, 2008; Bowles, 2008; Gneezy et al., 2011; Bowles and Polonía-Reyes, 2012).”
Between markets and hierarchies: The challenge of governing ecosystem services (2012, neutral): “Incentives often induce different behavioural changes in the short-run, as compared to the long-term (Gneezy et al., 2011), particularly when they are removed.”
Behavioral Economics and Psychology of Incentives (2012, neutral): “Gneezy et al. (2011) also provide a review of related literature, but they focus primarily on the impact of monetary incentives in education, contributions to public goods, and changes in people's lifestyles.”
Corporate Purpose and Financial Performance (2019, background): “…and Thompson 2009; Henderson and Van den Steen 2015), as well as research where workers either give up high compensation in return for meaning (Stern, 2004; Agarwal and Ohyama 2013; Burbano, 2016) or where compensation crowds out inherent meaning in work (Gneezy, Meier, and Rey-Biel, 2011).”
Neighbors, Knowledge, and Nuggets: Two Natural Field Experiments on the Role of Incentives on Energy Conservation (2013, background): “Understanding the most cost-effective level of financial incentives to change different types of behavior is a largely untapped area (Gneezy & Rustichini, 2000; Gneezy et al., 2011).”
The Devil in the Detail: A Practical Guide on Designing Payments for Environmental Services (2016, neutral): “In this case, payments have to be secured for the long run to avoid the reversal of gains in ES provision (Wunder et al., 2008) or that intrinsic motivations are crowded out once payments stop (Gneezy et al., 2011).”
Saving Power to Conserve Your Reputation? The Effectiveness of Private versus Public Information (2012, positive): “This is consistent with studies indicating that pecuniary incentives might be counterproductive for energy conservation because they might crowd out more altruistic or prosocial motivations (Bénabou and Tirole, 2006; Bowles, 2008; Gneezy et al., 2011).”