Why Are Financial Incentive Effects Unreliable? An Extension of Self-Determination

Abstract

This paper extends self-determination theory (SOT) to investigate the unreliability of financial incentives as motivators. The proposed model predicts that core financial need beliefs influence financial values, which in turn influence "hedonic" utility, i.e., happiness. Four financial need belief constructs are proposed and measured: (1) financial self-efficacy, (2) financial autonomy, (3) financial community-trust, and (4) financial community-support.