The two currencies, economic and social, can compete with and even undermine each other, potentially leading to bad decisions.

External and internal motivators

I want to next describe some different explanations for reward undermining. The first category of explanation comes from psychology and it focuses on the idea of motivation. A core concept and social psychology is that people don’t simply know the reasons for their actions, instead they have to infer further on reasons based on potential external and internal motivators.

Let’s consider a real-world controversy related to reward undermining: giving students incentives like money for earning good grades. Proponents of this idea argue that incentives can motivate students to attend class, to read article material and to pass end of year tests, but critics claim that paying students can eliminate students internal motivation robbing them of the level learning and curiosity that are necessary for long-term success.

So, let’s consider a simple experiment. A school introduces a new enrichment activity to two classrooms, say a new drawing easel and markers. in one classroom, students are told that they can draw pictures on that easel for a chance to win a prize to a gold star. In another classroom students are simply drawing for drawing sake, there’s no prize or other external incentive.

The key measure is how often students are drawn in the future when they are given the opportunity to go back to the drawing easel in their free time. In early studies of this sort it was found that students who were rewarded for. Participating in a fun activity were much less likely to seek out that activity in the future, that is if they were given an incentive the first time that they drew pictures then they weren’t motivated to draw pictures without that incentive.

The over-justification effect

This sort of reward undermining was initially called the over-justification effect – the external prize was enough to justify the behavior so it prevented internal motivation from developing. The drawing test becomes a means to an end rather than an end in itself. This is an early undermining perspective because it proposes that external incentives prevent internal motivation from forming in the first place.

Alternatively undermining might happen more gradually. Many studies have shown that external incentives don’t necessarily extinguish internal motivation especially if those incentives are in frequent and unexpected. Besides, nearly all students in the United States are constantly exposed to external incentives the form of grades and many of them remain curious and inquisitive learners.

So another undermining perspective would propose instead that external incentives won’t undermine internal motivation immediately but will instead have effects later as they are delivered repeatedly. It’s very difficult to discriminate between these two perspectives, but the key message is clear: we now know that motivation is an important contributor to reward undermining, but it isn’t the only contributor.

Think back to earlier in the article when I describe the brain’s reward system. Deep in the brain are neurons that use the chemical dopamine. Those neurons send signals the brain regions that help us learn so that we can learn to make choices that lead to good outcomes and avoid choices that lead to bad outcomes. I emphasize that dopamine was not associated with pleasure but instead with motivation.

The brain’s reward system

Rats, whose reward system has been disrupted by brain damage shown normal facial expressions of pleasure when food is placed in the mouth but the ark motivated enough to cross their cage to eat even if they are hungry. So if undermining is associated with disrupted motivation as the psychological theories contend the undermining should also disrupt the function of the brain’s reward system.

A group of neuroscientists ran a clever study to test this prediction. They allowed participants to play a simple stopwatch timing game you may have played a sort again yourself if you’ve never owned a digital watch. The participants just pressed the button once to start a timer and again to stop that time they tried to stop exactly in a target, say five seconds.

Participants find this game surprisingly fun, it’s difficult enough to be challenging but it’s also sort of test that you get better at overtime. The researcher split the participants into two groups. The first group began by playing the game for money the better they weren’t hitting the targets the more money they earned. The second group began by playing the game just for fun.

The researchers measured brain activation while the participants played this game and found that both groups showed considerable activation within the brain region that receives input from those dopamine neurons, that’s the hallmark of motivation. Then they had both groups play the game for a second session without any monetary reward.

An internal reward

In the group for which the economic incentive had been present but was taken away the activation in the brain region went back to baseline levels. It was as if the motivational signal the brain just disappeared, but in the group that wasn’t paid the first time the motivational signal the brain was still there and it was just as large as before. I want to remind you something that I introduced in an early article, the idea of range effects.

Range of effects occur because our sense of a meaningful difference in some quantity is inversely proportional to its range. Let’s apply this idea to motivation. It’s reasonable to assume that the range in the activity of our reward system will be smaller when we are just playing a game for fun the more playing a game for money. There is good evidence that external rewards vertically money have greater effects upon a reward system internal rewards like satisfaction.

And, there’s a good reason for that, those external rewards are very important for learning about the consequences of our decisions. From the perspective of our reward system reward undermining is like a range effect. When external incentive is provided it increases the range rewards to which our reward system responds. An internal reward seems small by comparison but if all we experiences bring internal rewards then those rewards seem much more important.