
Contents
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Is “Pay-for-Performance” Recommendable? A Taste of Heated Discussion in the Field of Economics Is “Pay-for-Performance” Recommendable? A Taste of Heated Discussion in the Field of Economics
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What is “Behavioral Economics”? What is “Behavioral Economics”?
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The Motivational Perspective of Behavioral Economics The Motivational Perspective of Behavioral Economics
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Managing Intrinsic Motivation: Crowding-Out and Crowding-In Managing Intrinsic Motivation: Crowding-Out and Crowding-In
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The Crowding-Out Effect The Crowding-Out Effect
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Crowding-out through Pay-for-performance Crowding-out through Pay-for-performance
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Crowding-out through Formal Control Crowding-out through Formal Control
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The Crowding-In Effect The Crowding-In Effect
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Crowding-in through Participation and through Organizational Fairness Crowding-in through Participation and through Organizational Fairness
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Crowding-in through Normatively Shaped Decision-Making Frames Crowding-in through Normatively Shaped Decision-Making Frames
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Crowding-in through Market-Driven Wages Crowding-in through Market-Driven Wages
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Conclusion Conclusion
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Notes Notes
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References References
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5 A Behavioral Economics Perspective on the Overjustification Effect: Crowding-In and Crowding-Out of Intrinsic Motivation
Get accessAntoinette Weibel, University of Konstanz
Meike Wiemann, University of Konstanz
Margit Osterloh, Center for Research in Management, Economics and the Arts, Zurich, Switzerland
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Published:04 August 2014
Cite
Abstract
In the last two decades, economic motivation research has undergone a paradigm shift when it comes to the effect of incentive schemes on individual performance and motivation. Inspired by self-determination theory, a new branch in economics evolved called behavioral economics. Especially by evidencing the negative effect of “pay-for-performance” on intrinsic motivation, called the “crowding-out” or “overjustification” effect, it challenges the economic paradigm of the relative price-effect and its inherent belief in incentives as universal remedy for motivation and individual performance. This article reviews the findings of behavioral economics on motivation. Drawing on these results we discuss which institutional conditions strengthen rather than weaken intrinsic motivation. We demonstrate that fairness, participation, market-driven wages, and normatively affected decision-making contexts have a positive effect on intrinsic motivation.
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