In general, incentives are anything that persuade a person or organization to alter their behavior in the desired manner. It is emphasized that incentives matter by the basic law of economists and the laws of behavior, which state that higher incentives amount to greater levels of effort and therefore higher levels of performance.
Protest sign displaying "Stop Climate Change" at climate strike in Melbourne, Australia. Climate movements may incentivize governments and industry to take collective action in the fight against climate change.
The overjustification effect occurs when an expected external incentive such as money or prizes decreases a person's intrinsic motivation to perform a task. Overjustification is an explanation for the phenomenon known as motivational "crowding out". The overall effect of offering a reward for a previously unrewarded activity is a shift to extrinsic motivation and the undermining of pre-existing intrinsic motivation. Once rewards are no longer offered, interest in the activity is lost; prior intrinsic motivation does not return, and extrinsic rewards must be continuously offered as motivation to sustain the activity.
Directional effects of rewards on motivation, depending on type of task, type of reward, and contingency of reward.
