Their discussion is about the economics and effectiveness of providing different types of incentives for different types of activities and the trade-offs that are sometimes inherent between short and long term goals and changes.
In other cases, incentives might have the desired effects in the short term, but they still weaken intrinsic motivations. Thus, once the incentives are removed, people may pursue the desired outcome less eagerly. To put it in concrete terms, an incentive for a child to read more might achieve that goal in the short term, but then be counterproductive as an incentive for students to enjoy reading and seek it out over their lifetimes.[snip]
His evidence shows that incentives offered for higher grades increased math scores but not those of other subjects, such as reading or social science. One possible interpretation of these results, compatible with research in psychology, suggests that external incentives may be more effective in concrete subjects, such as primary school math, than in more conceptual topics, such as reading and social sciences (Rouse, 1998).[snip]
When explicit incentives seek to change behavior in areas like education, contributions to public goods, and forming habits, a potential conflict arises between the direct extrinsic effect of the incentives and how these incentives can crowd out intrinsic motivations in the short run and the long run. In education, such incentives seem to have moderate success when the incentives are well-specifified and well-targeted (“read these books” rather than “read books”), although the jury is still out regarding the long-term success of these incentive programs. In encouraging contributions to public goods, one must be very careful when designing the incentives to prevent adverse changes in social norms, image concerns, or trust. In the emerging literature on the use of incentives for lifestyle changes, large enough incentives clearly work in the short run and even in the middle run, but in the longer run the desired change in habits can again disappear.
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Our message is that when economists discuss incentives, they should broaden their focus. A considerable and growing body of evidence suggests that the effects of incentives depend on how they are designed, the form in which they are given (especially monetary or nonmonetary), how they interact with intrinsic motivations and social motivations, and what happens after they are withdrawn. Incentives do matter, but in various and sometimes unexpected ways.All of which makes sense and reinforces my perspective that we drastically underrate the importance of culture, structure, continuity and tradition. For many people, designed incentives are unnecessary because the values and behaviors have already been internalized via family and culture.
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