Learning from feedback: exactingness and incentives.

In a series of five experiments, exactingness, or the extent to which deviations from optimal decisions are punished, is studied within the context of learning a repetitive decision-making task together with the effects of incentives. Results include the findings that (a) performance is an inverted-U shaped function of exactingness, (b) performance is better under incentives when environments are lenient but not when they are exacting, (c) the interaction between exactingness and incentives does not obtain when an incentives function fails to discriminate sharply between good and bad performance, and (d) when the negative effects of exactingness on performance are eliminated, performance increases with exactingness.     

The Hormonal Correlates of Implicit Motives

Implicit motives represent nonconsciously represented dispositions to seek specific classes of incentives and to avoid corresponding classes of disincentives. Growing evidence suggests that the implicit power motive is associated with basal levels and reactivity of the gonadal steroid hormones testosterone in men and estradiol in women. It is also associated with increased release of stress hormones (cortisol, norepinephrine) in response to dominance challenges and social defeat. The implicit affiliation motive is linked to the release of progesterone: increases in progesterone are followed by increases in affiliation motivation, and arousal of affiliation motivation is associated with concurrent or subsequent progesterone increases. There is limited evidence for a role of vasopressin in achievement motivation. These findings point to a key role of the hypothalamus for implicit motives, a role that is consistent with the existence of function‐specific nuclei within this brain area.     

Economic deprivation and the quality of parent-child relations: A trickle-down framework

The trickle-down model of economic activity proposes that changes in economic activity permeate downwards from incentives or disincentives to business, which affect business income, investment, employment, and the absolute and relative economic deprivation of the poor. Within an extended trickle-down framework, this paper examines how these effects trickle further downwards to influence the quality of parent-child relations. Two cases are examined. First, deprivation is discussed as it trickles down to affect the parental image conveyed to children, and in turn perceptions od parents are examined as these predict children's problem behavior. Second, deprivation is discussed as it trickles down to affect parents' psychological well-being and child-rearing capabilities, particularly as manifested by the incidence of child abuse and neglect. The evidence to date converges to indicate that children in general are not necessarily aware of or sympathetic to the plight of those under economic strain. Economic deprivation may exacerbate conflict in the family, diminish children's perceptions of parents, and give rise to problem behavior in boys. Evidence also suggests that deprivation may be an antecedent of poor psychological well-being in adults and child abuse. Possibilities for a “bubble up” model of economic activity are explored together with directions for further research.     

Helping behaviour among people who use drugs: Altruism and mutual aid in a harm reduction program

People who use drugs, and particularly people experiencing addiction, are rarely afforded the opportunity to have their voices heard when it comes to drug treatment or drug policy or even when attempting to define themselves and their life experiences. Of course, there is much more to a person than one area of their behaviour. The current study seeks to capture and understand the lived experiences of people who use drugs, with a focus on their relationships and helping behaviour. We interviewed 32 participants in a harm reduction program seeking to provide understanding beyond stigmatizing and criminalizing drug narratives, by exploring their motivation and context for helping behaviours. Grounded theory methodology was used to understand the patterns of helping behaviour, along with the contexts in which help is or is not given. We particularly focus on participants' distribution of syringes and carrying medicine to reverse overdose (naloxone). Participants shared stories of altruism and mutual aid, along with barriers and disincentives to helping others. We situate these behaviours within contrasting environments of a free harm reduction program and the competitive market system of the U.S. society. Implications for practice and public policy are discussed.     

A Moral Economy of American Medicine in the Managed-Care Era

The moral economy of American medicine has been transformed by contentious innovations in organization, administration, regulation, and finance. In many settings old fee-for-service incentives and disincentives have been replaced by those of ``managed care,' while in other settings they have been diluted or distorted. In the everyday care of patients, old and new may alternate or interact. These innovations may also be having secondary effects on participation in life-sciences research and the development and employment of new technologies, discouraging collective support for preliminary investigation and delaying adoption of improved goods and services until cost-reducing potential has already been realized. This motivational complexity, particularly in its moral dimensions, is hard to address using standard assumptions and methods. I argue for different assumptions, based on the clinical behavior of individual patients rather than the market behavior of aggregated consumers, and I describe a different method, based on an old idea in political economy. I then present a new way to explain the core obligations of clinicians, researchers, and planners and to interpret the policy problems they must now share.     

Judgments of risk frequencies: tests of possible cognitive mechanisms

How do people judge which of 2 risks claims more lives per year? The authors specified 4 candidate mechanisms and tested them against people's judgments in 3 risk environments. Two mechanisms, availability by recall and regressed frequency, conformed best to people's choices. The same mechanisms also accounted well for the mapping accuracy of estimates of absolute risk frequencies. Their nearly indistinguishable level of performance is remarkable given their different assumptions about the underlying cognitive processes and the fact that they give rise to different expectations regarding the accuracy of people's inferences. The authors discuss this seeming paradox, the lack of impact of financial incentives on judgmental accuracy, and the dominant interpretation of inaccurate inferences in terms of biased information processing.     

Pleasure and Aversion: Challenging the Conventional Dichotomy

Philosophy and its descendents in the behavioral sciences have traditionally divided incentives into those that are sought and those that are avoided. Positive incentives are held to be both attractive and memorable because of the direct effects of pleasure. Negative incentives are held to be unattractive but still memorable (the problem of pain) because they force unpleasant emotions on an individual by an unmotivated process, either a hardwired response (unconditioned response) or one substituted by association (conditioned response). Negative incentives are divided into those that are always avoided and those that are avoided only by higher mental processes—archetypically the passions, which are also thought of as hardwired or conditioned. Newer dichotomies within the negative have been proposed, hinging on whether a negative incentive is nevertheless sought (“wanted but not liked”) or on an incentive's being negative only because it is confining (the product of “rule worship”). The newer dichotomies have lacked motivational explanations, and there is reason to question conditioning in the motivational mechanism for the older ones.

Both experimental findings and the examination of common experience indicate that even the most aversive experiences, such as pain and panic, do not prevail in reflex fashion, but because of an urge to attend to them. The well-established hyperbolic curve in which prospective rewards are discounted implies a mechanism for such an urge, as well as for the “lower” incentives in the other dichotomies. The properties of these lower incentives are predicted by particular durations of temporary preferences on a continuum that stretches from fractions of a second to years.     

Independence and nonindependence: A simple method for comparing groups using multiple measures and the binomial test

Existing methods for conducting analyses of small group data are either highly complicated or yield low power. Both of these limitations provide disincentives for the progress of research in this field. An alternative method modelled on the sign (binomial) test which involves comparing the differences of distributions based on multiple observations of each of the groups is presented. The calculations involved in the procedure are extremely simple. It is suggested that because the method enhances researchers' ability to make sound statistical inferences easily this should stimulate research on group‐level processes and on social interaction more generally. Copyright © 2004 John Wiley & Sons, Ltd.     

Disentangling Psychological Sources of Overpricing in Anticommons Dilemmas: Strategic Incentives,Endowment Effects,and Interdependence of Outcomes

Anticommons are a special kind of mixed‐motive dilemma in which negative effects for society are caused by the excessive use of exclusion rights. In two fully incentivized experiments on trading goods with risky prospects, we disentangle three psychological sources that have been suggested to contribute to increased pricing in anticommons dilemmas: the effects of strategic incentives for overpricing, endowment effects, and interdependence of outcomes. Our results show that pricing of risky prospects in the anticommons is only marginally influenced by endowment status, whereas participants readily respond to incentives to overprice and to the interdependence of outcomes. Endowment effects are reduced both when strategic incentives to overprice are provided and when outcomes of subjects become interdependent. As a result, endowment effects for risky prospects are strongly reduced or even disappear completely in anticommons dilemmas. Our results render support for an interaction model instead of an additive effect model in which both incentives and endowment effects would drive up pricing. Copyright © 2014 John Wiley & Sons, Ltd.     

On the Social Psychology of Agency Relationships: Lay Theories of Motivation Overemphasize Extrinsic Incentives

Three laboratory studies and one field study show that people generally hold lay theories which contain an extrinsic incentives bias-people predict that others are more motivated than themselves by extrinsic incentives (job security, pay) and less motivated by intrinsic incentives (learning new things). The extrinsic incentives bias can be separated from a self-serving bias and it provides an empirical counterexample to the traditional actor-observer effect in social psychology (although its theoretical explanation is similar). This kind of bias may hinder organizations from organizing because people who act as principals may use improper lay theories to offer inappropriate deals to agents. Copyright 1999 Academic Press.     

Differential effects of noise and incentives on learning.

Three experiments are reported. In the first, monetary incentives improved the learning of nonsense words in response to colours only when the test order was the same as presentation order. In the second, incentives increased the recall of spatial location which served as an additional retrieval cue for nonsense words. In the third, noise was used to manipulate arousal. Noise during learning produced a significant decline in recall of locations for nonsense words. The results suggest that incentives increase attentional capacity, while noise does not. Previous results showing that noise increases the use of order cues are discussed and it is suggested that noise induces a type of learning which depends on order cues. Existing hypotheses about the nature of this process are noted but it is argued that further work is needed to select between them.     

An effort based analysis of the paradoxical effects of incentives on decision‐aided performance

This study examines the effect of incentives on decision‐aided performance. In particular, the study provides further insight into whether, when, and how incentives affect task performance in the presence of decision aids by (1) replicating previous research showing the negative effects of incentives on performance; (2) investigating whether this effect generalizes to a more realistic scenario in which decision makers have access to additional contextual information not captured by the decision aid; and (3) applying an effort‐based framework to explain the link between incentives and performance. In contrast to the findings of prior research, our study shows that incentives do not necessarily decrease performance in the presence of decision aids. Rather, we demonstrate that the effect of incentives on decision‐aided performance depends on other contextual factors such as the absence or presence of additional contextual information. By further specifying the conditions under which incentives result in increases or decreases to decision‐aided task performance, our results have implications for both future research and the design of incentive systems in practice. Copyright © 2010 John Wiley & Sons, Ltd.     

Identification Problems in Personality Psychology

This paper discusses and illustrates identification problems in personality psychology. The measures used by psychologists to infer traits are based on behaviors, broadly defined. These behaviors are produced from multiple traits interacting with incentives in situations. In general, measures are determined by these multiple traits and do not identify any particular trait unless incentives and other traits are controlled for. Using two data sets, we show, that substantial portions of the variance in achievement test scores and grades, which are often used as measures of cognition, are explained by personality variables.     

Effects of financial incentives on the breakdown of mutual trust

Disagreements between psychologists and economists about the need for and size of financial incentives continue to be hotly discussed. We examine the effects of financial incentives in a class of interactive decision-making situations, called centipede games, in which mutual trust is essential for cooperation. Invoking backward induction, the Nash equilibrium solution for these games is counterintuitive. Our previous research showed that when the number of players in the centipede game is increased from two to three, the game is iterated in time, the players are rematched, and the stakes are unusually high, behavior approaches equilibrium play. Results from the present study show that reducing the size of the stakes elicits dramatically different patterns of behavior. We argue that when mutual trust is involved, the magnitude of financial incentives can induce a considerable difference.     

Locomotor experience and use of social information are posture specific

The authors examined the effects of locomotor experience on infants' perceptual judgments in a potentially risky situation--descending steep and shallow slopes--while manipulating social incentives to determine where perceptual judgments are most malleable. Twelve-month-old experienced crawlers and novice walkers were tested on an adjustable sloping walkway as their mothers encouraged and discouraged descent. A psychophysical procedure was used to estimate infants' ability to crawl/walk down slopes, followed by test trials in which mothers encouraged and discouraged infants to crawl/walk down. Both locomotor experience and social incentives affected perceptual judgments. In the encourage condition, crawlers only attempted safe slopes within their abilities, but walkers repeatedly attempted impossibly risky slopes, replicating previous work. The discourage condition showed where judgments are most malleable. When mothers provided negative social incentives, crawlers occasionally avoided safe slopes, and walkers occasionally avoided the most extreme 50 degrees increment, although they attempted to walk on more than half the trials. Findings indicate that both locomotor experience and social incentives play key roles in adaptive responding, but the benefits are specific to the posture that infants use for balance and locomotion.     

Incentive Salience and Improved Performance

Using data from 441 call center employees at a large North American financial services firm, we studied how the frequency of thinking about an incentive available for performance led to increased output on an important performance metric. We find that people think more frequently about noncash tangible incentives (merchandise and travel) than cash incentives and that as the frequency of thought increases, performance increases. This leads to a larger performance boost for tangible incentives compared to a cash incentive of equal purchasing power. These results show an additional benefit from the use of tangible incentives and help answer the question regarding the psychological processes which make incentives motivating.     

A Model of Financial Incentive Effects in Decision Making

This paper proposes a model of the mediating processes whereby performance-contingent financial incentives influence decision quality and provides empirical evidence relevant to assessing the model. We hypothesize that performance-contingent incentives impact both cognitions and emotions, and that these cognitive and affective changes mediate the relationship between incentives and decision quality. To test these hypotheses, 84 undergraduate students were randomly assigned to conditions in which financial incentives were either performance contingent or randomly distributed. Participants used software that collected data on their information processing behavior to make choices from multiattribute choice information displays. After completing their choices, participants′ level of negative affect was assessed. Consistent with the predictions of the model, participants offered performance-contingent incentives took longer to choose, examined more information, had higher levels of negative affect, and used decision strategies that led to more accurate choices than participants offered randomly distributed incentives. Path analyses using structural equations modeling indicated that the changes in information processing behavior induced by financial incentives increased decision quality, while the increased levels of negative affect associated with incentives decreased decision quality. The paper concludes that identifying and measuring mediating variables is an important component of a research agenda designed to generate predictive theory of the relationship between financial incentives and decision quality.     

Money as tool, money as drug: the biological psychology of a strong incentive

Why are people interested in money? Specifically, what could be the biological basis for the extraordinary incentive and reinforcing power of money, which seems to be unique to the human species? We identify two ways in which a commodity which is of no biological significance in itself can become a strong motivator. The first is if it is used as a tool, and by a metaphorical extension this is often applied to money: it is used instrumentally, in order to obtain biologically relevant incentives. Second, substances can be strong motivators because they imitate the action of natural incentives but do not produce the fitness gains for which those incentives are instinctively sought. The classic examples of this process are psychoactive drugs, but we argue that the drug concept can also be extended metaphorically to provide an account of money motivation. From a review of theoretical and empirical literature about money, we conclude that (i) there are a number of phenomena that cannot be accounted for by a pure Tool Theory of money motivation; (ii) supplementing Tool Theory with a Drug Theory enables the anomalous phenomena to be explained; and (iii) the human instincts that, according to a Drug Theory, money parasitizes include trading (derived from reciprocal altruism) and object play.     

Reward, punishment, and cooperation: a meta-analysis

How effective are rewards (for cooperation) and punishment (for noncooperation) as tools to promote cooperation in social dilemmas or situations when immediate self-interest and longer term collective interest conflict? What variables can promote the impact of these incentives? Although such questions have been examined, social and behavioral scientists provide different answers. To date, there is no theoretical and/or quantitative review of rewards and punishments as incentives for cooperation in social dilemmas. Using a novel interdependence-theoretic framework, we propose that rewards and punishments should both promote cooperation, and we identify 2 variables—cost of incentives and source of incentives—that are predicted to magnify the effectiveness of these incentives in promoting cooperation.A meta-analysis involving 187 effect sizes revealed that rewards and punishments exhibited a statistically equivalent positive effect on cooperation (d =0.51 and 0.70, respectively). The effectiveness of incentives was stronger when the incentives were costly to administer, compared to free. Centralization of incentives did not moderate the effect size. Punishments were also more effective during iterated dilemmas when participants continued to interact in the same group, compared to both (a) iterated dilemmas with reassignment to a new group after each trial and (b) one-shot dilemmas. We also examine several other potential moderators, such as iterations, partner matching, group size, country, and participant payment. We discuss broad conclusions, consider implications for theory, and suggest directions for future research on rewards and punishment in social dilemmas.