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The Motivation crowding theory suggests that external interventions - monetary incentives or punishments - may undermine (and under different conditions strengthen) intrinsic motivation. The theoretical possibility of crowding out is widely accepted among economists. Many of them, however, have been critical about its empirical relevance. The idea that monetary incentives can crowd out the motivation to undertake an activity is usually considered a major anomaly because it predicts the reverse reaction expected according to the relative price effect, upon which much of accepted economics is based.

See also


  • Akerlof, G.A. (1982). Labor Contracts as Partial Gift Exchange. Quarterly Journal of Economics, Vol. 97, No. 4, pp. 543-569
  • Frey, Bruno S. and Jegen, Reto (2000). Motivation Crowding Theory: A Survey of Empirical Evidence. Zurich IEER Working Paper No. 26; CESifo Working Paper Series No. 245. Available at SSRN:


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