Forgoing earned incentives to signal pure motives

Erika L. Kirgios (), Edward H. Chang, Emma E. Levine, Katherine Milkman and Judd B. Kessler
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Erika L. Kirgios: Department of Operations, Information and Decisions, The Wharton School, University of Pennsylvania, Philadelphia, PA 19104
Edward H. Chang: Department of Operations, Information and Decisions, The Wharton School, University of Pennsylvania, Philadelphia, PA 19104
Emma E. Levine: Department of Behavioral Science, Booth School of Business, University of Chicago, Chicago, IL 60637
Judd B. Kessler: Department of Business Economics and Public Policy, The Wharton School, University of Pennsylvania, Philadelphia, PA 19104

Proceedings of the National Academy of Sciences, 2020, vol. 117, issue 29, 16891-16897

Abstract: Policy makers, employers, and insurers often provide financial incentives to encourage citizens, employees, and customers to take actions that are good for them or for society (e.g., energy conservation, healthy living, safe driving). Although financial incentives are often effective at inducing good behavior, they’ve been shown to have self-image costs: Those who receive incentives view their actions less positively due to the perceived incompatibility between financial incentives and intrinsic motives. We test an intervention that allows organizations and individuals to resolve this tension: We use financial rewards to kick-start good behavior and then offer individuals the opportunity to give up some or all of their earned financial rewards in order to boost their self-image. Two preregistered studies—an incentivized online experiment ( n = 763) on prosocial behavior and a large field experiment ( n = 17,968) on exercise—provide evidence that emphasizing the intrinsic rewards of a past action leads individuals to forgo or donate earned financial rewards. Our intervention allows individuals to retroactively signal that they acted for the right reason, which we call “motivation laundering.” We discuss the implications of motivation laundering for the design of incentive systems and behavioral change.

Keywords: incentives; motivation laundering; self-signaling (search for similar items in EconPapers)
Date: 2020
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