Introduction
In discussions and studies about human behavior, especially in the economic realm, a common question arises: what factors motivate people to exert effort, particularly when it involves perceived costs?
Traditionally, classical economic approaches focus on monetary incentives as the primary driver of effort. The assumption is that paying more results in increased work or productivity from individuals.
Beyond Monetary Incentives
However, behavioral economics and psychology have broadened the spectrum of potential motivators, suggesting that individuals also respond to social, emotional, and framing of reference motivations.
The Study by DellaVigna and Pope
Stefano DellaVigna and Devin Pope’s study, published in the Review of Economic Studies, aimed to analyze possible responses and measure the effectiveness of various incentive mechanisms. They conducted an experiment with nearly 10,000 participants, tasking them with alternately pressing two keys for ten minutes. The study tested 128 different types of incentive mechanisms, both monetary and non-monetary, studied in social psychology and behavioral economics, such as loss aversion, temporal discounting, or the “warm glow” effect of contributing to an altruistic cause.
Key Findings
- Monetary Incentives: The study confirmed that monetary incentives work consistently. Even low payments increased effort compared to receiving nothing, with productivity increases proportional to payment amounts.
- Psychological Incentives: Motivators like informing participants that others had surpassed certain benchmarks, displaying their ranking, or emphasizing task importance led to 15-21% productivity increases compared to the no-incentive group. However, their effectiveness was always lower than monetary incentives, even the smallest ones.
- Prosocial Motivations: Associating increased individual effort with donations to the Red Cross resulted in productivity gains, regardless of donation size. People seem more responsive to the satisfaction of “doing something good” than the actual amount donated.
- Temporal Preferences: Delayed payments reduced motivation, though not as drastically as some behavioral models predict. The decrease in effort was relatively uniform, with more significant differences observed among populations accustomed to economic uncertainty and instability.
- Prospect Theory Elements: Results were ambiguous when applying prospect theory, framing, and loss aversion. Participants performed slightly better when payments were framed as potential losses for failing to meet effort minimums. However, introducing probabilistic incentives led participants to consistently prefer secure over random rewards.
Implications for Precarious Contexts
In contexts of economic precarity (like that faced by a significant portion of Mexican households), the central conclusion is that even small monetary incentives have a direct impact. Small bonuses, symbolic attendance rewards, or reduced-amount transfers can suffice to boost participation and effort in certain social, labor, or educational programs.
Simultaneously, non-monetary motivators like comparisons with others, reinforcing a sense of community, or emphasizing task importance can be useful if they complement monetary incentives without additional costs.
Key Questions and Answers
- Q: What are the traditional economic approaches to motivation?
A: Classical economic approaches primarily focus on monetary incentives as the main driver of effort. - Q: What does behavioral economics and psychology suggest about motivation?
A: These fields propose that individuals also respond to social, emotional, and framing of reference motivations. - Q: What did DellaVigna and Pope’s study find about monetary incentives?
A: The study confirmed that monetary incentives work consistently, with even small payments increasing effort and productivity. - Q: How did psychological incentives perform in the study?
A: Psychological motivators led to 15-21% productivity increases but were less effective than monetary incentives. - Q: What were the findings regarding prosocial motivations?
A: Associating increased effort with donations to the Red Cross resulted in productivity gains, as people responded more to the satisfaction of “doing something good.” - Q: How did temporal preferences impact motivation in the study?
A: Delayed payments reduced motivation, though not as drastically as some behavioral models predict. - Q: What were the results when applying prospect theory elements?
A: Results were ambiguous, with participants performing slightly better when payments were framed as potential losses but preferring secure over random rewards.
