The world is full of schemes aiming to incentivize us; we’re spurred on to achieve new targets and scale new heights by the carrot of lucre-based incentivization schemes designed to appeal to our selfish natures.
Which is not surprising because we live in a society characterised by a belief that we’re all out for what we can get, wheeling and dealing in our own self-interest, forever trying to get the maximum reward for the minimum effort.
Which is like determining that 5 is the square root of 17. Anyone who truly believes that money is the main motivation for most of our behavior is someone whose belief system needs to be carefully inspected with one of those devices used for stirring septic tanks. Worse still, financial incentive schemes may actually miss the point by undermining our most cherishable quality: curiosity makes the man, even if it flattens the feline.
Moral Prices
We’ve previously seen that financial incentives may have the curious effect of reducing a person’s natural inclination to engage in some behavior or other. So, for instance, in Money Can't Buy You Happiness Swiss people who were reluctantly willing to put up with a waste plant on their doorstep out of their simple good natures suddenly went cold on the idea when offered money to meet what they’d previously regarded as their civic duties.
Or consider the study A Fine is a Price by Uri Gneezy and Aldo Rustichini where fining people for turning up late to pick their kids up from kindergarten actually increased the number of late arrivals. The researchers suggest that introducing a financial penalty removed the moral obligation to arrive on time; a financial transaction is not the same as a moral one.
This underlying natural inclination to behave morally is known in the jargon as intrinsic motivation (see When Incentives Go Bad) and its disappearance under the influence of financial incentives is known variously as the undermining effect or the overjustification effect or even the mouth-numbingmotivation crowding out effect.
Duped by Dopamine
Researchers have now found a neural mechanism to explain the effect, whatever the damn thing's called. Kou Murayamaa, Madoka Matsumoto, Keise Izuma, and Kenji Matsumoto in Neural Basis of the Undermining Effect of Monetary Reward on Intrinsic Motivation discovered that introducing performance based rewards on an interesting task actually reduced performance and, in particular, showed a decrease in activity in certain brain areas implicated in reward based processing – specifically one needed to prepare for mental processing and another implicated in the dopamine reward system: and we’ve met the dopamine reward system before, in Craving a High: Trading on Dopamine.
The idea that financial incentives can remove a person’s natural intrinsic motivation to engage in a high value task is a bit depressing if you’re particularly wedded to the idea that financial incentives are the solution to all ills. It’s probably closer to the truth to argue that they’re an easy answer to a difficult problem, and that most people are sufficiently self-interested not to argue with the prospect of extra money that they may get simply by getting lucky.
Curiosity Killed
However, perhaps the most depressing thing about this study is not that financial incentives don’t work but that they undermine peoples’ natural tendency to involve themselves in stuff that interests them. Because if there’s one quality that should define a human being above all others it’s curiosity – someone who is no longer interested in the world around them is someone who’s not really engaged with life and it’s a depressing thought that many of us end up trapped in circumstances that mean we carry on with the same old grind purely because of financial circumstances.
Of course a study showing that intrinsic motivation is reduced in the presence of financial rewards is not the same as one that says that it’s increased in the presence of simple curiosity. However, such a idea exists, something known as the information-gap theory, hypothesised by George Loewenstein in The Psychology of Curiosity: A Review and Reinterpretation:
“The proposed theory views curiosity as occurring when an individual’s informational reference point becomes elevated in a certain domain, drawing attention to an information gap. Curiosity is the feeling of deprivation that results from an awareness of that gap”.
Burning Bright
As Loewenstein points out, this may not explain all aspects of curiosity, but it’s an interesting approach and one that’s now been investigated using the same sort of neural analysis as in the previous study. In The Wick in the Candle of Learning Loewenstein and colleagues have shown that:
"Subjects spend more scarce resources (either limited tokens, or waiting time) to find out answers when they are more curious. The fMRI also showed that curiosity increases activity in memory areas when subjects guess incorrectly, which suggests that curiosity may enhance memory for surprising new information. This prediction about memory enhancement is confirmed in a behavioral study— higher curiosity in the initial session is correlated with better recall of surprising answers 10 days later.”
And are you curious about which brain area is implicated in this information gap theory? Well, it’s that darned reward modulating dopamine system again. Indeed, enhanced curiosity about a particular subject was also correlated to the ability of experimental participants to recall answers to questions that interested them, suggesting that this mechanism is implicated in general learning.
Uncertainly Curious
As the study carefully points out this is almost certainly not the final word on curiosity – there are wide range of complicating effects which haven’t been teased out – but it’s certainly part of the answer. In a world saturated by information, much of which is irrelevant, it certainly raises issues about how we choose what to be curious about.
The theory, and the evidence, also argues that uncertainty is initially correlated with curiosity:
“The fact that curiosity increases with uncertainty (up to a point), suggests that a small amount of knowledge can pique curiosity and prime the hunger for knowledge, much as an olfactory or visual stimulus can prime a hunger for food, which might suggest ways for educators to ignite the wick in the candle of learning.”
Beyond a certain point, though, increasing uncertainty leads to declining curiosity. We know that peaks in uncertainty in financial markets are linked to a wide range of generally poor behavioral traits: perhaps beyond a given point it just gets too difficult to integrate new information with old, such that curiosity is overwhelmed by novelty. After all, how many of us had experienced the nightmare of irrational markets at their worst before 2008?
Neuroeconomic Stimulation
Linking curiosity and financial incentives to intrinsic motivation and both to our dopamine modulating systems, while showing that different levels of curiosity are invoked by increasing uncertainty offers us a neat story but one that’s probably only a pastiche of the truth. Nonetheless, even glimpsing a path from brain structures to individual behavior to behavioral economics is a step forward, and a small triumph for neuroeconomics.
But broadly speaking if you want to motivate them stimulate their interest. Only don’t overstimulate them, because they’ll probably start behaving less rationally than you’d want: truly this is incentives through the looking glass. Which is curious, is it not?
The undermining effect, the overjustification effect and the motivation crowding out effect added to The Big List of Behavioral Biases.