Big Question: The Nature and Extent of Post-reward Crowding-out

Principal Investigator: Oleg Urminsky, Booth

Funding Type: Seed

Focus Areas: Complexity, Information

Big Idea: While incentives can have a powerful influence on behavior, research on intrinsic motivation has suggested that rewards can crowd-out task interest, reducing engagement when rewards are withdrawn. This research has resulted in widespread skepticism among practitioners and academics alike about using incentives in behavioral interventions. Recent field studies examining the long-term effects of temporary incentives have, however, failed to document negative effects. Using repeated moment-to-moment measures, our initial studies reconcile these two disparate findings, documenting a robust short-lived crowding-out effect that happens immediately after the reward is withdrawn (“momentary crowding-out") but no long-term negative effect of incentives. Using controlled lab studies we plan to investigate the mechanism behind this short-term crowding-out, ways to prevent it, and how it can inform the theories of intrinsic motivation.  We also plan to investigate the real-world effect of ending an incentive in the field. We believe that this research has the potential to help resolve the debate about use of incentives in policy, and fundamentally alter how and when incentives are used to change behavior and improve social outcomes.