Incentives Activate a Control Mind-Set: Good for Deliberate Behaviors, Bad for Habit Performance

Incentives have dual effects in consumer settings: The benefits on deliberate consumer purchase and performance are well known. But the detrimental effects on habit performance are less recognized. In the present research, we traced these dual outcomes to consumers’ lay theories about action control when incentivized. An initial study demonstrated that, when given incentives, consumers believed thoughtful and effortful action control strategies were better than relying on habit, despite strong evidence that relying on habit would have been successful. We then tested the effects of incentives on habits in an experimental task. When the task was learned using conscious rules, incentives had the well-known effect of benefitting performance. However, when the task was learned habitually, incentives impeded performance. Participants ended up overriding habits that had been successful in the past. We discuss these dual effects of incentives for managing repeated patronage and its implications for attitudinal versus habitual loyalty.