Why do we work harder when we are promised a reward?

Incentivization

, explained.
Bias

What is Incentivization?

Incentivization is attaching a reward to a given behavior, or threatening a penalty for failing to do that behavior. In some cases, incentives are powerful tools to motivate people to take a certain action. Other times, however, incentives can backfire, and might decrease motivation instead of increasing it.

Where this bias occurs

Robert is a smoker who has been wanting to quit for a long time now. He enrols in a program that promises financial rewards for smokers who successfully quit. First, if he completes a course on smoking cessation, he’ll get $100. Next, if he can stay off of cigarettes for six months, he’ll receive $250. Finally, continuing not to smoke for another six months after that will net him $400. After quitting, Robert has strong cravings for a cigarette, and it’s hard to resist the temptation to smoke—but every time he considers reaching for a pack of cigarettes, the promise of so much extra cash motivates him to stick with it instead.

Related Biases

Sources

  1. Graham, G. (2000, May 26). Behaviorism. Stanford Encyclopedia of Philosophy. https://plato.stanford.edu/entries/behaviorism/#PopuBeha
  2. Azab, M. (2017, February 23). The neuroscience of wanting and pleasure. Psychology Today. https://www.psychologytoday.com/ca/blog/neuroscience-in-everyday-life/201702/the-neuroscience-wanting-and-pleasure
  3. Adinoff, B. (2004). Neurobiologic processes in drug reward and addiction. Harvard Review of Psychiatry, 12(6), 305-320. https://doi.org/10.1080/10673220490910844
  4. Berridge, K. C., & Robinson, T. E. (2016). Liking, wanting, and the incentive-sensitization theory of addiction. American Psychologist, 71(8), 670-679. https://doi.org/10.1037/amp0000059
  5. Goleman, D. (1987, August 25). Embattled Giant Of Psychology Speaks His Mind. The New York Times. https://www.nytimes.com/1987/08/25/science/embattled-giant-of-psychology-speaks-his-mind.html
  6. Koren, M. (2013, March 20). B.F. Skinner: The man who taught pigeons to play Ping-Pong and rats to pull levers. Smithsonian Magazine. https://www.smithsonianmag.com/science-nature/bf-skinner-the-man-who-taught-pigeons-to-play-ping-pong-and-rats-to-pull-levers-5363946/
  7. Ryan, R. M., & Deci, E. L. (2000). Intrinsic and extrinsic motivations: Classic definitions and new directions. Contemporary Educational Psychology, 25(1), 54-67. https://doi.org/10.1006/ceps.1999.1020
  8. Gneezy, U., Meier, S., & Rey-Biel, P. (2011). When and why incentives (Don't) work to modify behavior. Journal of Economic Perspectives, 25(4), 191-210. https://doi.org/10.1257/jep.25.4.191
  9. Lepper, M. R., Greene, D., & Nisbett, R. E. (1973). Undermining children's intrinsic interest with extrinsic reward: A test of the "overjustification" hypothesis. Journal of Personality and Social Psychology, 28(1), 129-137. https://doi.org/10.1037/h0035519
  10. Kohn, A. (1993, September/October). Why incentive plans cannot work. Harvard Business Review, 2-7. https://hbr.org/1993/09/why-incentive-plans-cannot-work
  11. Samson, A. (2019, July 30). How incentives can build good habits. Psychology Today. https://www.psychologytoday.com/ca/blog/consumed/201907/how-incentives-can-build-good-habits
  12. McLeod, S. (2018). Edward Thorndike - Law of effect. Simply Psychology. https://www.simplypsychology.org/edward-thorndike.html
  13. Bénabou, R., & Tirole, J. (2005). Incentives and prosocial behavior. The American Economic Review, 96(5), 1652-1678. https://doi.org/10.3386/w11535

About the Authors

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Dan Pilat

Dan is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. Dan has a background in organizational decision making, with a BComm in Decision & Information Systems from McGill University. He has worked on enterprise-level behavioral architecture at TD Securities and BMO Capital Markets, where he advised management on the implementation of systems processing billions of dollars per week. Driven by an appetite for the latest in technology, Dan created a course on business intelligence and lectured at McGill University, and has applied behavioral science to topics such as augmented and virtual reality.

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Dr. Sekoul Krastev

Sekoul is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. A decision scientist with a PhD in Decision Neuroscience from McGill University, Sekoul's work has been featured in peer-reviewed journals and has been presented at conferences around the world. Sekoul previously advised management on innovation and engagement strategy at The Boston Consulting Group as well as on online media strategy at Google. He has a deep interest in the applications of behavioral science to new technology and has published on these topics in places such as the Huffington Post and Strategy & Business.

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