Reconciling Economics and Psychology on Intrinsic Motivation

This article analyzes how the debate on intrinsic motivation was imported from psychology into economics. The most important differences between the two disciplines are in the definition of intrinsic motivation and in the timing of the undermining effect of rewards. The economic framework of intertemporal choices is proposed to reconcile the different empirical and theoretical results arising in the literature, and it is shown how rewards induce substitution and income effects depending on whether they are transitory or permanent.