Exploitation aversion: When financial incentives fail to motivate agents

Jeffrey Carpenter and David Dolifka

Journal of Economic Psychology, 2017, vol. 61, issue C, 213-224

Abstract: Studies of the principal-agent relationship find that monetary incentives work in many instances but that they can also backfire. Various mechanisms for this failure have been examined (e.g., intrinsic motivation, image concerns). We posit that an aversion to being exploited, i.e., being used instrumentally for another’s benefit, can also cause incentives to fail. Using an experiment we find that compliance is lower for exploitative principals compared to neutral ones despite using the same contracts. To corroborate our results we show that surveyed “exploitation aversion” mediates this effect. Our results have implications for the design and implementation of incentives within organizations.

Keywords: Financial incentives; Motivation; Crowding; Power; Exploitation; Experiment (search for similar items in EconPapers)
JEL-codes: C92 J33 M52 M55 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Working Paper: Exploitation Aversion: When Financial Incentives Fail to Motivate Agents (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:61:y:2017:i:c:p:213-224

DOI: 10.1016/j.joep.2017.04.006

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