Motivation, Incentives and Performance: An Interdisciplinary Review

Abstract

This review aims to extend the application of economic knowledge to evidence supplied by other research areas on the relationships between incentives, motivation and performance. Six areas of investigation have been selected based on their potential contribution in addressing three issues relevant to economics. The first issue concerns the distinction between intrinsic and prosocial motivation; the second is the relationship between motivation and performance; the third relates to the existence of perverse effects of incentives on motivation, which can take the form of undermining or crowding-out effects. The results are discussed in terms of their implications for economic theory, showing that different mechanisms are at work under intrinsic or prosocial motivation, implying the need for different instruments to promote behaviors and associated performance. In terms of crowding-out effects, there is little evidence to support a perverse effect when incentives are offered before or during performance, whereas the psychological literature provides consolidated validation for the undermining effect. Economics can gain insights from other disciplines by employing their investigative tools and theoretical developments. A feature of particular interest for economics is gamification, that is, the use of game design elements (design of video games and similar games) in non-game contexts.