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We thank Eugene M. Caruso, Sanford E. DeVoe, Bruno S. Frey, Nick Haslam, Hal E. Hershfield, Michael Morris, Mike Norton, Olav Sorenson, and Philip Tetlock for their cogent and helpful comments on an earlier draft of this article. An early version of this theory was presented at the 2019 Norms and Behavioral Change Conference at the University of Pennsylvania. A previous version of the manuscript was posted on a personal website of one of the authors.
Our life is built around coordinating efforts with others. This usually involves incentivizing others to do things and sustaining our relationship with them. Using the wrong incentives backfires: it lowers effort and tarnishes our relationships. But what constitutes a “wrong” incentive? And can incentives be used to shape relationships in a desired manner? To address these and other questions, we introduce relational incentives theory, which distinguishes between two aspects of incentives: schemes (how the incentive is used) and means (what is used as an incentive). Prior research has focused on means (e.g., monetary vs. nonmonetary incentives). Our theory highlights the importance of schemes, with a focus on how they interact with social relationships. It posits that the efficacy of incentives depends largely on whether the scheme fits the relational structure of the persons involved in the activity: participation incentive schemes for communal sharing relations, hierarchy for authority ranking relations, balancing for equality matching relations, and proportional incentive schemes for market pricing relations. We show that these four schemes encompass some of the most prevalent variants of incentives. We then discuss the antecedents and consequences of the use of...