Extrinsic incentives can undermine civic-spirited motives in institutions.
Bénabou and Tirole formalised what field data kept showing: paying for blood donation reduces supply. The payment reframes an act of civic identity as a low-wage transaction.
In practice
- A council pays residents to report fly-tipping and finds reports rise while tipping does not fall, because the reporting was already being done for nothing.
- A school introduces a reward for reading and the children who read anyway begin asking what they get.