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Motivation Crowding Theory: A Survey of Empirical Evidence

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Author Info
Frey, Bruno S.
Jegen, Reto

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Abstract

The motivation crowding effect suggests that an external intervention via monetary incentives or punishments may undermine (and under different indentifiable conditions strengthen) intrinsic motivation. As of today, the theoretical \lang1033 possibility of crowding effects is widely accepted among economists. Many of them, however, have been critical about its empirical relevance. This survey shows that such scepticism is unwarranted and that there exists indeed compelling empirical evidence for the existence of crowding out and crowding in. It is based on circumstantial insight, laboratory studies by both psychologists and economists as well as field research by econometric studies. The presented pieces of evidence refer to a wide var iety of areas of the economy and society and have been collected for many different countries and periods. Crowding effects thus are an empirically relevant phenomenon, which can, in specific cases, even dominate the traditional relative price effect.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 245.

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Date of creation: 2000
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Handle: RePEc:ces:ceswps:_245

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Related research
Keywords: Crowding effect; intrinsic motivation; principal-agent theory; economic psychology; experiments;

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Find related papers by JEL classification:
A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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  1. Reinganum, Jennifer F & Wilde, Louis L, 1986. "Equilibrium Verification and Reporting Policies in a Model of Tax Compliance," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(3), pages 739-60, October. [Downloadable!] (restricted)
  2. Steven F. Venti & David A. Wise, 1987. "Have IRAs Increased U.S. Saving?: Evidence from Consumer Expenditure Surveys," NBER Working Papers 2217, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  1. Karine Nyborg and Mari Rege, 2001. "Does Public Policy Crowd Out Private Contributions to Public Goods?," Discussion Papers 300, Research Department of Statistics Norway. [Downloadable!]
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  2. Marie-Claire Villeval & David Dickinson, 2004. "Does Monitoring Decrease Work Effort ? The Complementarity Between Agency and Crowding-Out Theories," Working Papers 0409, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure. [Downloadable!]
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  3. Rafael Rob & Peter Zemsky, . "Social Capital, Corporate Culture and Incentive Intensity," Penn CARESS Working Papers 7380c2f90d0b2f362ad71f139, Penn Economics Department. [Downloadable!]
  4. Cárdenas, Juan-Camilo & Ostrom, Elinor, 2004. "What do people bring into the game: experiments in the field about cooperation in the commons," CAPRi working papers 32, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  5. Petersen, Verner C., 2005. "The otherworldly view of economics - and its consequences," Working Papers 2005-13, University of Aarhus, Aarhus School of Business, Department of Management. [Downloadable!]
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