A Price Is a Signal: on Intrinsic Motivation, Crowding-out, and Crowding-in
If a previously unpaid activity (e.g. donating blood) is paid, then we often observe that this activity is reduced. In this paper, it is hypothesized that the price offered is taken as a proxy for the "value" of the activity. Depending on how the actor valued the activity previously, crowding-out or crowding-in is implied, an effect with or without persistence after stopping the payment. The model can be adapted to a number of similar situations, including those where a high price signals high costs instead of high values. Our "naïve" explanation is confronted with <link rid="b2">Bènabou and Tirole's (2003)</link> Principal-Agent model. A questionnaire study supports our basic hypothesis as well as some of the derived consequences, and contradicts Bènabou and Tirole's model. Copyright © 2010 Blackwell Publishing Ltd.
Year of publication: |
2010
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Authors: | Bolle, Friedel ; Otto, Philipp E. |
Published in: |
Kyklos. - Wiley Blackwell, ISSN 0023-5962. - Vol. 63.2010, 1, p. 9-22
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Publisher: |
Wiley Blackwell |
Saved in:
freely available
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