Playing `Hard to Get': An Economic Rationale for Crowding Out of Intrinsically Motivated Behaviour

Wendelin Schnedler and Christoph Vanberg

The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK

Abstract: Anecdotal, empirical, and experimental evidence suggests that offering extrinsic rewards for certain activities can reduce people's willingness to engage in those activities voluntarily. We propose a simple rationale for this `crowding out' phenomenon, using standard economic arguments. The central idea is that the potential to earn rewards in return for an activity may create incentives to play `hard to get' in an effort to increase those rewards. We discuss two specific contexts in which such incentives arise. In the first, refraining from the activity causes others to attach higher value to it because it becomes scarce. In the second, restraint serves to conceal the actor's intrinsic motivation. In both cases, not engaging in the activity causes others to offer larger rewards. Our theory yields the testable prediction that such effects are likely to occur when a motivated actor enjoys a sufficient degree of `market power'.

Keywords: intrinsic motivation; crowding out; behavioural economics; market power; hidden information (search for similar items in EconPapers)
JEL-codes: C9 D1 D4 D8 M5 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2014-03
References: Add references at CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Playing ‘hard to get’: An economic rationale for crowding out of intrinsically motivated behavior (2014)
Working Paper: Playing 'Hard to Get': An Economic Rationale for Crowding Out of Intrinsically Motivated Behavior (2014)
Working Paper: Playing 'Hard to Get': An Economic Rationale for Crowding Out of Intrinsically Motivated Behavior (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bri:cmpowp:14/320

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