Cutting the Interest Rate

Definition

Extrinsic motivators — rewards and punishments outside the task itself — don't just fail to match the power of intrinsic motivation (enjoying something for its own sake); they actively erode it. When someone starts doing something they already liked in order to obtain a reward for it, their genuine interest in the activity measurably declines, often outlasting the reward itself. Kohn's title metaphor: rewards act like a bribe that "buys off" intrinsic motivation, cutting the rate of return the activity itself was already paying.

In the Book

Kohn grounds this in the two founding experiments of the effect, run independently in the early 1970s. Edward Deci had college students work on an engaging spatial puzzle; those secretly paid for it later spent less free time playing with the same puzzle than unpaid subjects — "money may work to 'buy off' one's intrinsic motivation," in Deci's words. Mark Lepper, prompted by watching Head Start classrooms where reward-driven learning games were abandoned the moment the rewards stopped, ran a Magic Marker study with fifty-one preschoolers: children promised a certificate for drawing later showed less interest in drawing than both unrewarded peers and their own prior selves. Kohn also tells the joke of the old man who pays neighborhood kids to heckle him, gradually cuts the payment, and watches them quit in disgust once it drops to a penny — precisely because he had converted their voluntary jeering into paid labor, then made the pay not worth it.

Why It Matters

This is the mechanism behind a familiar but underused warning: adding pay or prizes to something people already do for free doesn't add motivation on top of what was there, it can replace and then destroy it. It applies wherever an institution is tempted to formalize an existing volunteer, hobbyist, or intrinsically driven activity with a payment or badge — open-source contribution, employee referral bonuses for enthusiastic advocates, gamifying an app people already enjoyed — and it predicts that the reward's removal won't just return people to baseline, it can leave them less interested than before the reward existed.