Working Paper: CEPR ID: DP2579
Authors: Roland Bénabou; Jean Tirole
Abstract: This paper studies the interactions between an individual's self-esteem and his social environment - in the workplace, at school, and in personal relationships. Because a person generally has only imperfect knowledge of his own abilities, people who derive benefits from his performance (parent, spouse, friend, teacher, manager, etc.) have incentives to manipulate his self--confidence. We first study situations where an informed principal chooses an incentive structure, such as offering payments or rewards, delegating a task, or giving encouragement. We show that extrinsic rewards may have hidden costs - as stressed by psychologists - in that they undermine intrinsic motivation. As a result, they may be only weak reinforcers in the short run, and become negative reinforcers once withdrawn. Similarly, empowerment is likely to increase motivation, while offers of help may create a dependence. More generally, we identify when the hidden costs of rewards are a myth or a reality. We next consider situations where people criticize or downplay the performance of their spouse, child, colleague, or subordinate. We formalize ego-bashing as reflecting battles for dominance or authority within the relationship. Finally, we turn to the self-presentation strategies of privately informed agents. We study in particular how depressed individuals may engage in self-deprecation as a way of seeking leniency (a lowering of expectancies) or a ?helping hand? on various obligations.
Keywords: incentives; motivation; psychology; economics; rewards; self-confidence; self-presentation; signaling; standards
JEL Codes: A12; C70; D10; D60; J22; J24; J53
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| extrinsic rewards (M52) | intrinsic motivation (O31) |
| withdrawal of rewards (G35) | intrinsic motivation (O31) |
| principal's choice of reward structure (M52) | intrinsic motivation (O31) |
| empowerment (M54) | motivation (M54) |
| offers of help (F35) | agent's ability to perform independently (L85) |
| egobashing (Y60) | dominance (C72) |
| principal's expectations (D84) | intrinsic motivation (O31) |
| agent's perception of expectations (D84) | intrinsic motivation (O31) |