A central theme in economics is that individuals respond to incentives that promote their commitment and performance.
The “principal-agent paradigm” focuses on the incentives necessary to ensure that the agent is willing to offer the level and intensity of work desired by the “principal”.
Agency theorists therefore tend to focus on extrinsic motivation and to ignore the intrinsic motivation to work, assuming that the effect of the latter leads only to an exogenous shift in the labor supply curve.
In psychology, the effect of external incentives on the motivation of individuals is somewhat more controversial. Many authors have suggested that rewards and punishments may indeed be counterproductive insofar as they can depress the intrinsic motivation of individuals.
Recent developments in the economic literature (Bénabou and Tirole, 2003, Frey, 1997; Kreps, 1997) seem to support this view. These works have focused on studying the conditions characterizing interpersonal relationships (e.g. the degree of information or the qualitative profile of the agents, etc.) that contribute to determining the successfulness of using forms of incentives within principal-agent type relationships.
Therefore, the basic idea is that external adjustments are not always effective in improving the performance of agents and that to improve the latter they have to be inserted in an appropriate context. According to Frey (1997) what really matters is, “the systematic working relationship between intrinsic and extrinsic incentives, because the use of extrinsic incentives may displace (crowd out) the intrinsic motivation related to working under certain conditions.”
The concept of intrinsic motivation expresses the desire to undertake an activity for the satisfaction inherent in it, rather than for a separate consequence (Deci and Ryan, 2000a).
Intrinsically motivated persons will then activate to those actions that stimulate their interest, challenge, pleasure and that do not put them under external pressures; intrinsic motivation is therefore self-determined.
In contrast, extrinsically motivated activities will be undertaken as instrumental to obtaining a reward in the form of a prize, praise, recognition, but also approval of oneself.
The Self-Determination Theory (SDT), proposed by Deci and Ryan (1985), is an influential psychological theory of intrinsic motivation. By contrast, the Cognitive Evaluation Theory (CET), presented by the same authors, is a sub-theory, which aims at specifying the factors that determine the variability of intrinsic motivation.
CET is based on the idea that when individuals look at a project, they evaluate it by assessing the extent to which it fulfills their innate need to feel competent and in control.
If people think they are able to complete the project, they are intrinsically motivated to complete it, without the need for any form of additional external stimulus.
The basic assumption of the theory is that there are innate needs for autonomy and competence that determine how individuals react to external incentives.
The concept of “perceived locus of causality” is thus particularly important because it is what links motivation and action.
External factors in the form of tangible rewards, deadlines, or surveillance tend to diminish the feeling of autonomy and competence of individuals because they involve a change in the perception of causation that leads them to action.
Initially, the individual perceives the action as causally linked to an inner desire.
Subsequently, the introduction of extrinsic motivators results in the disappearance of this causal connection. Now, in fact, the push is perceived as external, and this undermines the intrinsic motivation of the agent related to undertaking that particular action.
In order for people’s level of intrinsic motivation to be maintained or possibly enhanced, they not only need to feel competent but also need to perceive their behavior as self-determined (Deci and Ryan, 2000b). Therefore, to be effective, feedback and counter-performances must be accompanied by a corresponding sense of perceived autonomy.
The Self Determination Theory (SDT) goes further and analyzes the environmental conditions that contribute to influencing the innate psychological needs of individuals. In fact, Deci and Ryan (2000b) hypothesized the existence of three basic psychological needs: competence, autonomy and being with others (relatedness).
Compared to CET, the SDT softens the distinction between intrinsic motivation and extrinsic motivation; therefore, it is more suitable for analyzing the relationship between incentives and motivation.
This theory goes beyond the intrinsic-extrinsic dichotomy: while intrinsically motivated behavior is, by definition, independent, extrinsic motivation can vary in terms of self-determination-control.
It further stresses that extrinsically motivated behaviors can become independent through a process that it defines internalization.
Hence, through this process initially external forms of regulation become progressively internal because people tend to assimilate them and make them their own.
Unlike other perspectives, the SDT proposes that extrinsic motivation can vary considerably in its degree of relative autonomy (Deci and Ryan, 2000b).
For example, students who work hard to obtain good results may do so because they consider it particularly important for their future life but also to satisfy their parents.
Both cases show extrinsically motivated behaviors and yet the degree of autonomy of the two regulations is very different.
In the first case, the young people make a personal choice to which they attach particular importance, whereas in the second case they simply adapt to an external regulation.
The theory places the different types of extrinsic motivation along a continuum according to the regulation’s increasing degree of autonomy, assuming at the same time that not all forms of regulation become internal over time.
For example, if a student perceives studying as an imposition, the regulation is called external.
Conversely, if the commitment to studying is seen as a moral duty then the regulation is said to be introjected. Instead, effort undertaken to achieve a goal considered important, and thus valued by the individual because instrumental, shows an identified type of regulation
Finally, the most independent form of extrinsic motivation is the integrated type of regulation
These are the rules that are accepted and assimilated by people as needs and values of the self.
These actions differ from those intrinsically motivated only because they are undertaken to obtain a separate result, other than the mere pleasure of undertaking them.
Thus, extrinsically motivated behaviors become more efficient as the degree of internalization of external regulations by the individual increases. In this sense, the presence of a cognitive feedback can ensure that control through an external regulation, and not only through the external influence of a principal, is effective.
However, several authors (Hernandez and Iyengar, 2001; Iyengar e Lepper, 1999) have suggested that this theoretical construct may not be suitable to describe the motivational dynamics of different ethnic groups.
Although traditional theories of human motivation suggest the centrality of individual action and self-determination as motivating forces underlying all human behaviors, recent research developments (Markus and Kitayama, 1991) suggest that the basic assumptions inherent in human motivation might not be as relevant between members of more interdependent cultures.
Markus and Kitayama (1991) have identified two dimensions that can be used to characterize the differences between cultures: independence and interdependence. Both of these concepts relate to the way people perceive themselves.
According to these authors, Europeans and American Caucasians (more generally identified with the members of Western cultures) can be defined as independent because they tend to emphasize the role of the individual.
On the other hand, they suggest that people from Asian (oriental) cultures can be defined as interdependent because their cultures tend to emphasize the importance of the group over the individual.
This interdependent view is exemplified by the Japanese culture and by other Asian cultures, and is also characteristic of African cultures and of many South American and southern European countries.
The hypothesis formulated by Markus and Kitayama (1991) proposes that the prevalence within a culture of the desire for independence or, alternatively, of interdependence, affects the cognition, emotion, and motivation of its members.
Although the ability to make choices is common to different societies and cultures, it can have very different psychological and interpersonal consequences depending on how the choices are perceived socially and experienced personally.
Essentially two methods are used to make choices.
On the one hand, people make choices based on their personal preferences.
On the other, they can make choices by adapting themselves to the desires, expectations, and needs of the other person in the relationship (Kitayama and Uchida, 2004).
Empirical results show that Asian people may be motivated to work hard on a project when it is chosen by another person they consider “significant.”
In a recent experiment (Iyengar and Lepper, 1999), it was shown that removing the possibility of choice from individuals belonging to these two cultural groups produces different reactions.
In particular, it emerged that this deprivation had adverse effects on the intrinsic motivation of young Europeans or Americans, regardless of the identity of the usurper causing this limitation.
Differently, the effect on the intrinsic motivation of young Asian Americans depended on the fact that they perceived the usurper either as a benevolent agent (i.e. important for them) or as an outsider. In this case, boys were motivated when the choice was made by their mother.
This and other findings suggest that the motivation of individuals of oriental origin toward “obtaining” might be socially oriented, that is, they desire to succeed in what other people “significant” for them expect they will succeed in (Kitayama and Uchida, 2004).
As we have seen, Western culture and psychological theory formulated on the basis of the latter are used to identify behaviors undertaken to meet requests by third parties as extrinsically motivated.
However, most members of interdependent cultures might find it more natural and motivating to adapt themselves to the desires of others (Hernandez and Iyengar, 2001).
Hernandez and Iyengar (2001) hypothesized that people from cultures that give importance to independence will be oriented toward personal action, whereas people from cultures that emphasize interdependence will be oriented toward collective action.
They further argue that this behavior necessarily involves the emergence of conflicting cultural differences with regard to cognition and human motivation.
Deci and Ryan (2000a) suggest that the search for conditions that promote or undermine human potential has practical as well as theoretical importance.
Thus, it can contribute to formal knowledge of the causes of human behavior and to designing a social environment that optimizes people’s development, performance, and wellbeing.
Social contexts catalyze motivational differences in the growth of people, with the result that in some situations, domains, or cultures there are more self-motivated, energetic, and integrated people than in others.
Therefore, in principle the theory implies that personal action is absent among the members of more interdependent cultures and that collective action has negative consequences among members of more independent cultures.
Although research has not yet focused on the motivational effects of transferring individuals from their original cultural contexts into different ones, preliminary studies suggest that exposure to cultures with opposing ideologies might affect human cognition.
Therefore, examining the relationship between motivational orientations and interdependent / independent cultural orientations of immigrants moving to societies culturally distant from their own might be useful for investigating why people from various cultures behave differently and are successful in different ways.
Consistent with the hypothesis that those who strive to act collectively will be more motivated by contexts that allow them to meet and to satisfy social obligations and duties, it can be hypothesized that members of families that have emigrated from countries culturally distant from western ones will respond differently than their peers if subjected to external incentives.
In the light of Hernandez and Iyengar’s (2001) proposals, immigrants from countries we have defined as culturally “oriental” (perhaps also including countries that have experienced collectivist phases), will likely place particular importance on coordinating their individual behavior with that of their family and ethnic group.
Like Borjas (1992), who had introduced the notion of the role of ethnic capital as an externality within the human capital process of accumulation, we can speculate that cultural differences linked to the ethnic group of belonging may contribute to determining the speed of the process of assimilation of generations of immigrants by influencing the motivational dynamics of individuals.
Shaping the work of policy makers by taking into account these differences could help facilitate the process of economic and cultural integration of second generation immigrants.
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