The Pied Piper: Prizes, Incentives, and Motivation Crowding-In

38 Pages Posted: 21 May 2019

See all articles by Luigino Bruni

Luigino Bruni

affiliation not provided to SSRN

Vittorio Pelligra

Universita di Cagliari - Department of Economics

Tommaso Reggiani

Masaryk University

Matteo Rizzolli

LUMSA University

Date Written: March 2019

Abstract

In mainstream business and economics, prizes such as the Presidential Medal of Freedom are understood as special types of incentives, with the peculiar features of being awarded in public, and of having largely symbolic value. Informed by both historical considerations and philosophical instances, our study defines fundamental theoretical differences between incentives and prizes. The conceptual factors highlighted by our analytical framework are then tested through a laboratory experiment. The experimental exercise aims to analyze how prizes and incentives impact actual individuals' behavior differently. Our results show that both incentives (monetary and contingent) and prizes (non-monetary and discretional rewards) boost motivation to perform if awarded publicly, but only prizes crowd-in motivation promoting virtuous attitude.

Keywords: incentives, prizes, awards, crowding-in, meaning, intrinsic motivation

JEL Classification: B1, D03, J33

Suggested Citation

Bruni, Luigino and Pelligra, Vittorio and Reggiani, Tommaso and Rizzolli, Matteo, The Pied Piper: Prizes, Incentives, and Motivation Crowding-In (March 2019). IZA Discussion Paper No. 12250. Available at SSRN: https://ssrn.com/abstract=3390240

Luigino Bruni

affiliation not provided to SSRN

Vittorio Pelligra

Universita di Cagliari - Department of Economics ( email )

V. S. Ignazio 17
Cagliari 09123, CA 09123
Italy

Tommaso Reggiani (Contact Author)

Masaryk University ( email )

Zerotinovo nam. 9
60177 Brno, 603 00
Czech Republic

HOME PAGE: http://https://www.muni.cz/en/people/241092-tommaso-reggiani

Matteo Rizzolli

LUMSA University ( email )

Via Pompeo Magno
Roma, Rome 00191
Italy

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