An economic analysis of the Motivation Crowding-out Theory

Frey's Motivation Crowding-Out Theory serves as the focal point of this economic analysis, exploring how monetary rewards can diminish intrinsic motivation. The paper delves into crowding-out effects, their conditions, and implications within economic contexts, particularly in human resources. It critically examines diverse psychological and economic literature, questioning the relevance of these effects to classical economic theory. The conclusion suggests that, based on current knowledge, integrating the crowding-out concept into classical economics is not advisable.