Reading: Crowding out and crowding in motivation

by Chris F

I’ve started reading on why people do things in order to better understand the rewards and how they would work for my dissertation. In my travels through academic journals, I found an interesting one by Bruno S. Frey, written in 2012. In his article, he discussed the concepts of “crowding out” and “crowding in” intrinsic motivation. He starts by explaining what the concepts are, then goes on to discuss the different types of motivation and afterwards gives examples of how different rewards have had diverse effects on intrinsic motivation. What I find really concerning at this point in my dissertation is that I realize that in order to experiment how rewards work in the real world, they actually had to apply them to real-world scenarios, using real-world people. They experimented concepts of psychology, more or less, on real people, and in at least one of the cases that I will write about below, it turned out not so good. As a future graduate, it makes me a bit nervous that what I will do will have real world applications and effects that might be positive, but especially that they might be negative. No pressure, Chris.

So, what exactly is crowding in and crowding out intrinsic motivation?

Crowding out – taking a crowd of people out? Maybe they got free crumpets

They are concepts taken from economy (who said Games Design is a narrow field?), and according to Frey, they appear in relation to external reward systems and intrinsic motivation like so:

1) External intervenions crowd-out intrinsic motivation if the individuals affected perceive them to be controlling. In that case, both self-determination and self-esteem suffer, and the individuals react by reducing their intrinsic motivation in teh activity controlled.
2) External interventions crowd-in intrinsic motivation if the individuals concerned perceive it as supportive. In that case, self-esteem is fostered, and individuals feel that they are given mroe freedom to act, thus enlarging self-determination.

Frey goes on to talk about the consequences of the above on the labour market. He states that, according to text-book economics, if a worker is paid more, he will perform better. According to recent studies, however, that may not be true. What these have found out is that, based on the work that a person does, sometimes better pay can actually decrease the efficiency of a worker. 128 experiments have been carried out, and the results showed that tangible rewards have a significant negative effect for interesting tasks. However, verbal rewards have a significant positive impact for intrinsic motivation. Tangible rewards do not crowd-out intrinsic motivation when they are unexpected or not contingent on task behaviour. The conclusion of the experiments is that the main negative effect of tangible rewards is that they undermine self-regulation and that people take less responsibility for motivating themselves.

In other words, you’re getting paid to do what you’re doing, so it doesn’t matter if you show a genuine interest in it or not. The case studies of this theory are really revealing.

I will only discuss 2 of the examples that Frey gives. The first one is the frightening one that I mentioned earlier: at a day-care center, parents were sometimes late when picking their children up, and teachers had to stay over the scheduled time in order to wait for them. What the management decided to try and do was to enforce a penalty for the parents who were late, and fined them for “a substantial amount of money”. What the normal economic theory predicts is that less parents would be late in picking their children up, for fear of being fined. However, what happened is that more and more parents came late to pick up their kids. They were no longer motivated intrinsically to do this, by shame or something similar, but instead thought of the fine as a “I can come late” tax, which they could afford to pay. What scared me with this example is that although the experiment was carried out for only 12 weeks and then stopped, the rate of late picking up did not decrease but remained at a steady level. In Frey’s words, the parent’s intrinsic motivation had been crowded out. This scares me because something actually happened in those parents’ minds as a result of the experiment which made them care less for their children.

The second example is one that has to do with airlines. According to the studies cited in this journal article, the airline which has the least delays is the company which reports the delay as a “team delay”, instead of a “engineering delay” or “pilot delay” or anything else which singles out either a person or a group of people. What I believe happens here is that by knowing that you won’t be singled out if something bad happens, you will try more to better yourself. If you do a boo-boo, the whole team takes the blame, not only you, so you should work as hard as you can and help others, because you have nothing to lose, as opposed to the singled-out model where you might not want to help out a colleague who’s in a bit of a muddle for fear of having the fault falling on your head.

Frey also cites another one of his own studies which mentions that offering tangible rewards for task efficiency in a volunteering program has reduced the efficiency of the whole program vastly, because volunteers are not motivated by external rewards but by their intrinsic motivation.

What I took from this article is that people do some things because they want to, because they are intrinsically motivated, and great care should be taken with the reward system, especially in a crowd-sourced project like OpenStreetMap, because it might prove to do more harm than help. People work better if you show support for them, allowing them some creative freedom, showing interest in their passions. Financial or tangible rewards based on how well a person performs their task might make that person work for the reward instead of the reason why they started working in the first place, and as such, reduce their motivation and performance because, to be an incurable romantic, they no longer do it from the heart. Another thing that I liked from this article was that people kept working as hard as before if they were given unexpected tangible rewards. This ties into how people like it when they are being surprised, and will love the one-off reward. In the end, I believe this study shows, among other things, why the “Kill 10 wolves”, “Kill 50 wolves”, “Kill 100 wolves”, “Kill 1000 wolves” progression doesn’t work in lazy MMORPGs

Chris F.

Bruno S. Frey. (2012). Crowding effects on intrinsic motivation. Renewal : a Journal of Labour Politics. 20 (2/3), p91-98.