Why Monetary Incentives are like Cocaine

I’m sure most business students would be familiar with Herzberg’s Motivation-Hygiene Theory and money’s place within it. In short, a person’s salary, no matter how high, would not be able to make her satisfied at work, it merely prevents her from being dissatisfied (hence, it is a hygiene factor). However, the Brafman brothers refer to several experiments that suggest that, at least in some circumstances, a monetary reward actually serves as a disincentive.

If you’ve read the post about cigarette packaging, you’d have heard of the part of the brain called the nucleus accumbens. Other than being known as the craving spot, it is also called the pleasure center. In an MRI study conducted as Duke University, scientists have revealed a link between monetary incentives and cocaine. As explained in Sway: The Irresistible Pull of Irrational Behaviour:

“At its most extreme, the pleasure center drives addiction. A drug like Cocaine Moneycocaine, for example, triggers the nucleus accumbens to release dopamine, which creates feelings of contentment and ecstasy. The reason cocaine is so addictive is that the pleasure center goes into overdrive and the threshold for excitement climbs higher and higher. The MRI study surprised the researchers because it revealed that the pleasure center is also where we react to financial compensation. And the more money there is on the line, the more the pleasure center lights up. A monetary reward is – biologically speaking – like a tiny line of cocaine.”

The researchers also found that a different part of the brain, the posterior superior temporal sulcus, is activated during acts of altruism. Also known as the altruism center, it is responsible for our social interactions.

The thing is, the pleasure center and the altruism center cannot both function at the same time – you can activate either one or the other (evidenced by the Swiss nuclear waste anecdote). While the altruism center is easily activated just by the sense that you’re helping someone, the pleasure center requires much more stimuli in order to motivate behaviour. Also, when these two go head-to-head, the authors found that the pleasure center is able to hijack the altruism center. For example, if you start telling volunteers that they would get a free trip to Greenland if they came in for 40 hours a month, then it will come to pass that they will be fixated on the reward and the accumulation of hours instead of the initial (presumably altruistic) reasons that compelled them to volunteer in the first place. It might be expected that this change in motivation would cause them to act differently, resulting in possibly adverse consequences. Hmmm… I wonder what this says about our millionaire ministers?

You should also take note that it is the anticipation of the reward that actually triggers the pleasure center to release dopamine, and not the reward per se. Well, I thought this might be something you’d want to consider the next time you feel like dangling the promise of a new bike/holiday/iPhone in front of your kid in return for better grades. And maybe charities should take heart and stop giving freebies that mean nothing to people who are actually trying their best to care.


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