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

This paper explores the effectiveness of monetary incentives in modifying behavior across various non-employment contexts, including education, public goods contributions, and lifestyle changes. It emphasizes the dual nature of monetary incentives: while they can incentivize desirable behaviors through direct price effects, they also have the potential for crowding-out intrinsic motivation due to psychological effects. Through models such as Benabou and Tirole (2006) and contrasting views from Bernheim and Rangel (2004), the paper discusses the complexities of using extrinsic rewards and the potential implications for long-term behavioral changes.