Motivation crowding-out: Is there a risk for science?

Performance related pay is playing an increasing role in scientific research. This development, which applies the results of standard economic theories (the principal-agent model), aims at increasing incentives and thus productivity in science. The objective of this paper is then to cross the works of various economic fields, including those in economics of science and those on the theories of individual motivation, in order to explore the consequences of this development on scientists’ incentives and to focus on its possible "perverse effects". Two key elements emerge from our literature review: firstly, the motivations of researchers are complex and multiple and do not depend solely on their salary level; secondly, the literature on the theories of incentives identifies a risk that increasing monetary incentives, paradoxically, reduce the overall level of staff motivation, especially when there exist other sources of motivation (as is usually the case in science). According to this literature there may therefore exist a "hidden cost" to financially reward scientists. These teachings lead us to construct empirically testable propositions about the implications of performance related pay in science and the conditions of emergence of a motivation crowding-out effect.