A Price is a signal: on intrinsic motivation and crowding-out

Friedel Bolle

No 250, Discussion Papers from European University Viadrina Frankfurt (Oder), Department of Business Administration and Economics

Abstract: If a previously unpaid activity (donating blood) is paid then we often observe that this activity is reduced. In this paper, it is hypothesised that the price offered is taken as a proxy for the "market value" of the activity. Depending on how the actor valued the activity previously, crowding-out or crowding-in, as well as persistence (or not) of the effect after the abandoning of payment is implied. This "naive" explanation is confronted with Bénabou and Tirole´s (2003) priciple-agent model where the opposite signalling effect is hypothesised: a higher price is taken as an indication for a lower value.

Keywords: Intrinsic Motivation; Crowding-out; Signaling (search for similar items in EconPapers)
JEL-codes: D64 D82 H42 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:euvwdp:250

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