Behavioral Economics and Psychology of Incentives
Emir Kamenica Booth School of Business, University of Chicago, Chicago, Illinois 60637;
email: emir.kamenica@chicagobooth.edu Annu. Rev. Econ. 2012. 4:427–52
First published online as a Review in Advance on April 5, 2012 The Annual Review of Economics is online at economics.annualreviews.org This article’s doi:10.1146/annurev-economics-080511-110909
Copyright © 2012 by Annual Reviews. All rights reserved JEL codes: D03, J33, D86 1941-1383
Keywords：motivation, choking, inference, nudging
Abstract
Monetary incentives can backfire while nonstandard interventions,such as framing,can be effective in influencing behavior.I review the empirical evidence on these two sets of anomalies.Paying for inherently interesting tasks,paying for prosocial behavior,paying too much,paying too little, and providing too many options can all be counterproductive.At the same time,proper design of the decision-making environment can be a potent way to induce certain behaviors.After presenting the empirical evidence,I discuss the relative role of beliefs, preferences, and technology in the anomalous impacts of incentives.I argue that inference,signaling,loss aversion,dynamic inconsistency,and choking are the primary factors that explain the data.