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Reflexive Governance for Global Public Goods$
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Eric Brousseau, Tom Dedeurwaerdere, and Bernd Siebenhüner

Print publication date: 2012

Print ISBN-13: 9780262017244

Published to MIT Press Scholarship Online: August 2013

DOI: 10.7551/mitpress/9780262017244.001.0001

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Crowding Out and Crowding In of Intrinsic Preferences

Crowding Out and Crowding In of Intrinsic Preferences

(p.75) 4 Crowding Out and Crowding In of Intrinsic Preferences
Reflexive Governance for Global Public Goods

Bruno Frey

The MIT Press

This chapter develops a crowding theory for preferences, discusses its role in social psychology, integrates it with economics, and analyzes conditions under which the crowding-out effect occurs. It demonstrates that economic theory and policy are influenced by such crowding effects. More care is needed to apply incentives in firms, or in the public sector, or when applying incentive instruments to economic policy. External intervention crowds out intrinsic motivation, which results in distinct behavioral responses to price changes. External intervention also crowds in or encourages intrinsic motivation when concerned individuals consider it supportive. Intrinsic motivation is possibly affected by all kinds of external intervention to the concerned individual. Rewards and commands of any kind also restrict intrinsic motivation considerably.

Keywords:   crowd theory, crowding out, intrinsic motivation

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