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Intrinsic and Extrinsic Motivation - Princeton University

Review of Economic Studies (2003) 70, 489 520 0034-6527/03/00190489$ c 2003 The Review of Economic Studies Limited Intrinsic and Extrinsic Motivation ROLAND BE NABOU. Princeton University and Institute for Advanced Study and JEAN TIROLE. IDEI (Universite de Toulouse I), CERAS and MIT. First version received February 2000; final version accepted January 2003 (Eds.). 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.

In well-known contributions, Etzioni (1971) argues that workers find control of their behaviour via incentives “alienating” and “dehumanizing”, and Deci and Ryan (1985) devote a chapter of their book to a criticism of the use of performance-contingent rewards in the work setting.2 And,

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