Motivation crowding theory

The Motivation Crowding Effect suggests that external intervention via mone tary incentives or punishments may undermine, and under different identifia ble conditions strengthen, intrinsic motivation. As of today, the theoretic al possibility of motivation crowding has been the main subject of discussi on among economists. This study demonstrates that the effect is also of emp irical relevance. There exist a large number of studies, offering empirical evidence in support of the existence of crowding-out and crowding-in. The study is based on circumstantial evidence, laboratory studies by both psych ologists and economists, as well as field research by econometric studies. The pieces of evidence presented refer to a wide variety of areas of the ec onomy and society and have been collected for many different countries and periods of time. Crowding effects thus are an empirically relevant phenomen on, which can, in specific cases, even dominate the traditional relative pr ice effect.