Ten years ago, if you had told any economist that you intended to establish an encyclopedia that asked people to work 20 - 30 unpaid hours a week writing articles that you planned to give away for free, that economist would have stared at you as if you had three heads. “Why on earth,” he would have wondered, “will anyone participate in that?”
Though we Wikipedia triumphed where Nupedia failed, the economist’s question remains unanswered. Why do people decide to participate in P2P communities in the first place? Why are highly skilled, technically sophisticated people using their limited discretionary time to do the unpaid work of writing and editing articles for an online encyclopedia?
To answer that, we must pose a new question: “What motivates us to work?” This was what the Federal Reserve asked when it funded a study in 2005 led by behavioral economists from the Massachusetts Institute of Technology, University of Chicago, and Carnegie Mellon. Generations of economists and businessmen had assumed motivation followed a carrot-and-stick logic: dangle a reward in front of a mule and the mule will improve its performance. The better the reward, the better the performance.
Conducted on the MIT campus, the Federal Reserve study required that students complete a series of challenges: memorize strings of digits, solve word and spatial puzzles, and complete physical tasks.
All involved creativity, motor skills, and concentration. To give the students an incentive to perform their best, the study offered three levels of monetary rewards – the highest was $50.
What happened? As long as the task involved only mechanical skill – i.e., “put ball in hoop” – the carrot-and-stick rewards worked: the better the reward, the better the performance. That makes sense. But if the task required even rudimentary cognitive skill – i.e., “prevent the candle wax from dripping on the table”—better rewards led to poorer performance. The results suggest that if an activity requires cognitive skill, rewards hurt performance.
Perplexed, the team hypothesized that the $50 prize was not enough of an incentive for MIT students. So they redid the experiment in Madurai, India, where $50 is a significant reward. The results, however, did not change: higher incentives had an adverse effect on performance. Since then, psychologists, sociologists, and other economists have replicated the study with the same results. Even researchers at the esteemed London School of Economics – alma mater of 12 Nobel Laureates in economics – examined 51 pay-for-performance studies. “We find that financial incentives can result in a negative impact on overall performance,” they concluded in June 2009. In other words, “if/then rewards” can undermine our ability to think creatively when we try to solve a problem.
If dangling a carrot can undermine even rudimentary cognitive engagement in an activity, the question remains: “What motivates us to work?”
Economists believe that the motivation to participate depends on the presence or absence of three psychological needs:
- Autonomy: the urge to direct our own lives.
- Mastery: the desire to get better and better at something that matters.
- Purpose: the yearning to act in the service of something larger than ourselves.
If a structured activity offers these benefits, people will participate in it with their full being. And that is why people chose to participate in a common P2P endeavor.
(NOTE: to understand the next paragraphs, you need to first a previous post on the seven components of designing thriving P2P activity.)
Autonomy, mastery, and purpose are the intrinsic psychological rewards of the P2P models. Every platform begins with a higher purpose as defined by element #3: a motivating goal. Motivating goals always point toward an inspiring, transformative end and never to a payday. In pursuit of that goal, individuals act with element #6: tools for autonomous and creative action. To surround an individual with the means to act creatively is to fill him with the sense of autonomy he demands. Finally, P2P platforms nurture desires for mastery through element #7: measure progress. Measuring progress facilitates learning and acquiring the skills needed to achieve mastery at playing the game.
Yes, man is a profit maximizer, but only up to a certain point. After that, we are purpose maximizers. This is why people flock to a P2P platforms: such infrastructures of cooperation tap into the intrinsic drives of the human spirit. So if you want to inspire people to involve themselves deeply in your organization, don’t treat them like mules. Treat them like people who possess the dreams and aspirations to create meaningful change in their lives and in the world. Do this, and they will author encyclopedias with you. They’ll produce music albums with you and invite people to sleep on their couches. They will build homes, share their pantry, and write textbooks with you. And if you ask them very nicely, they just might help you create a billion-dollar revenue stream for your company.
1. Dan Ariely, Uri Gneezy, George Loewenstein, and Nina Mazar, “Federal Reserve Bank of Boston, Working Paper No. 05-11,” July 2005.
2. London School of Economics: http://www2.lse.ac.uk/newsAndMedia/news/archives/2009/06/performancepay.aspx
4. Bowles, Sam, “Policies Designed for Self-Interested Citizens May Undermine ‘The Moral Sentiments’: Evidence from Economic Experiments.” Science 320 (2008): 5883 (June 20).
5. Teresa M. Amabile and Steven J. Kramer, “What Really Motivates Workers,” Harvard Business Review (January 2010).
6. Karim R. Lakhani and Robert G. Wolf, “Why Hackers Do What They Do: Understanding Motivation and Effort in Free/Open Source Software Projects,” Perspectives on Free and Open Software, edited by Joseph Feller, Brian Fitzgerald, Scott A. Hissam, and Karim R. Lakhani (MIT Press, 2005).