Back
Last updated: Mar 17, 2025

Why Extrinsic Incentives Can Mislead Our Choices

Understanding Extrinsic Incentives Bias

Extrinsic incentives bias is a concept in psychology that explains how external rewards can influence our choices and actions, sometimes in ways that aren't beneficial. Let’s dive into what this means, how it works, and some real-life examples.

What Are Extrinsic Incentives?

Extrinsic incentives are rewards that come from outside of ourselves. These can include:

  • Money
  • Grades
  • Promotions
  • Praise from others

These incentives can encourage us to perform tasks or achieve goals, but they can also lead us to make decisions that don't align with our true values or interests.

How Does Bias Come Into Play?

When we prioritize these external rewards, we may overlook intrinsic motivations—those that come from within, like personal satisfaction or a genuine interest in a task. This bias can skew our decision-making process in various ways:

  1. Overemphasis on Rewards: We might focus more on what we can gain, rather than enjoying the task itself.
  2. Reduced Creativity: Relying too much on rewards can stifle creativity and innovation, as we may stick to what we know works to earn those rewards.
  3. Short-Term Focus: This bias often leads to a short-term mentality, where we make choices based on immediate rewards rather than long-term benefits.

Types of Extrinsic Incentives Bias

There are different ways that extrinsic incentives can create a bias in our thinking:

  • Monetary Rewards: For instance, if a student is offered money for good grades, they might focus solely on grades instead of truly learning the material.
  • Social Recognition: Some individuals may engage in behaviors just to gain approval or recognition from peers, which might not align with their true interests or values.
  • Competition: In competitive environments, people might make choices based on beating others rather than pursuing personal growth.

Real-Life Examples

Example 1: The Student

Imagine a student who loves art but decides to pursue business solely because they believe it will earn them a higher salary. This student might excel at business due to the extrinsic incentive of money but miss out on personal fulfillment and creativity that comes from pursuing their passion for art.

Example 2: The Employee

Consider an employee who is always chasing bonuses. They might work extra hours to hit targets but feel stressed and burnt out. Their motivation is driven by the external reward rather than a passion for their job, leading to decreased job satisfaction and possibly even poorer performance over time.

Example 3: Parenting

Parents sometimes reward children with treats for good behavior. While it can be effective in the short term, it may lead the child to behave well only for the reward, rather than understanding the importance of good behavior itself.

Recognizing Extrinsic Incentives Bias

Here are some steps to identify if you or someone you know is experiencing extrinsic incentives bias:

  1. Reflect on Motivations: Ask yourself why you are pursuing a particular goal. Is it for personal satisfaction or external rewards?
  2. Evaluate Choices: Consider if your decisions are influenced more by potential rewards than by your values.
  3. Seek Balance: Strive to find a mix of intrinsic and extrinsic motivations in your pursuits.

By being aware of extrinsic incentives bias, we can make more informed choices that align with our true selves and goals. Remember, while external rewards can be motivating, they shouldn’t dictate our paths.

Dr. Neeshu Rathore

Dr. Neeshu Rathore

Clinical Psychologist, Associate Professor, and PhD Guide. Mental Health Advocate and Founder of PsyWellPath.