Motivation Crowding Theory: A Survey of Empirical Evidence

Posted: 29 Oct 2002

See all articles by Bruno S. Frey

Bruno S. Frey

CREMA; University of Basel

Reto Jegen

University of Zurich - Department of Economics

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The Motivation Crowding Effect suggests that external intervention via monetary incentives or punishments may undermine, and under different identifiable conditions strengthen, intrinsic motivation. As of today, the theoretical possibility of motivation crowding has been the main subject of discussion among economists. This study demonstrates that the effect is also of empirical relevance. There exist a large number of studies, offering empirical evidence in support of the existence of crowding-out and crowding-in exists. The study is based on circumstantial evidence, laboratory studies by both psychologists and economists, as well as field research by econometric studies. The pieces of evidence presented refer to a wide variety of areas of the economy and society and have been collected for many different countries and periods of time. Crowding effects thus are an empirically relevant phenomenon, which can, in specific cases, even dominate the traditional relative price effect.

Keywords: Crowding effect, intrinsic motivation, principal-agent theory, economic psychology, experiments

Suggested Citation

Frey, Bruno S. and Jegen, Reto, Motivation Crowding Theory: A Survey of Empirical Evidence. Available at SSRN:

Bruno S. Frey (Contact Author)

CREMA ( email )

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University of Basel ( email )

Peter Merian-Weg 6
Basel, 4002

Reto Jegen

University of Zurich - Department of Economics ( email )

Zuerich, 8006
+41 1 63 43795 (Phone)

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