Academic journal article The American Journal of Economics and Sociology

Intrinsic Motivation and the Logic of Collective Action: The Impact of Selective Incentives

Academic journal article The American Journal of Economics and Sociology

Intrinsic Motivation and the Logic of Collective Action: The Impact of Selective Incentives

Article excerpt

[S]triving for the public happiness (in some concrete respect) and attaining it cannot be neatly separated. Indeed the very act of going after the public happiness is often the next best thing to actually having that happiness ... the benefit of collective action for an individual is not the difference between the hoped-for result and the effort furnished by him or her, but the sum of these two magnitudes! ... [S]ince the output and objective of collective action are ordinarily a public good available to all, the only way in which an individual can raise the benefit accruing to him from the collective action is by stepping up his own input, his effort on behalf of the public policy he espouses. Far from shirking and attempting to get a free ride, a truly maximizing individual will attempt to be as activist as he can manage, within the limits set by his other essential activities and objectives. (Hirschman 1977: 85-86)

I

Introduction

AT THE HEART OF Albert O. Hirschman's argument above is the notion of intrinsic motivation. This concept comes from psychology and is defined as "doing the activity for its inherent satisfaction rather than for some separable consequence. When intrinsically motivated a person is moved to act for the fun or challenge entailed rather than because of external prods, pressures, or rewards" (Ryan and Deci 2000a: 56). Alternatively, extrinsic motivation relates to activities done in order to attain some separable outcome or instrumental value. (1) In Hirschman's account, intrinsic motivation goes some way toward explaining why rational individuals contribute to collective action instead of simply free riding on others' contributions. Another reason for not free riding is, of course, the application of selective incentives (Olson [1965] 1971). These can either coerce free riders or reward those contributing toward the collective good. They may take the form of legal penalties (fines, incarceration), social sanctions (ostracism), social rewards (status and respect), or economic prizes (transfers, assets, or private goods).

Intrinsic motivation and selective incentives are not unrelated. Frey (1994, 1997) and Frey and Oberholzer-Gee (1997) have presented both a theory and empirical evidence that alerts us to a potentially undesirable effect of economic incentives; namely, that they may crowd out intrinsic motivation (see also Jones et al 1998; Ostrom 2000a). In line with this, Frey (1997) argues that civic virtue, environmental or work morale, volunteer work, blood donations, and even military morale can be crowded out by external incentives that ignore the presence of intrinsic motivation. Frey's discussion of this tradeoff is not couched in the context of the collective action problem. As a result, he talks of price or monetary incentives, not of selective incentives, although conceptually both are identical since they are external to the individual. This article will place Frey's insights squarely within the context of collective action. Doing so facilitates a better understanding of the implications of the relationship between intrinsic motivation and selective incentives for the provision of collective goods and offers some fresh insights on Frey's thinking on this important tradeoff. Ultimately, I will argue that designing selective incentives that are sensitive to the existence of intrinsic motivation is a cost-minimizing strategy for society.

The article is structured as follows. In Section 2, I carefully define intrinsic motivation as a preference, to differentiate it from other definitions adopted either explicitly or implicitly in the literature. This allows me, in Section III, to present a probabilistic model of the free rider problem that incorporates the idea of intrinsic motivation and captures the individual's choice calculus in the context of the collective action problem. Armed with this model, in Section IV I revisit Frey's ideas on the crowding-out effect and point to the implications for collective action and for Frey's insights. …

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