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Monetary incentives, even though apparently efficient in driving performance of workers, have drawbacks, explains BRUNO S. FREY. They can result in a reorientation of workers from their focus on quality towards merely meeting objectives. The experiment presented in this video studies the impact of replacing monetary incentives with symbolic awards. The positive effect on the performance of workers highlights the potential of a well calibrated award environment. The individual’s needs for recognition and acknowledgement of efforts show to be key elements in boosting intrinsic motivation.


Bruno S. Frey is a permanent Visiting Professor at the University of Basel and research director of the Centre for Research in Economics, Management and the Arts (CREMA), Switzerland. For his extensive research on political economy, corporate governance and psychological approaches to economics, Frey has been awarded five Honorary Doctorates from diverse international institutions.

Frey argues for an interdisciplinary approach to economics. His recent research combines a political and economic lens to the study of such themes as terrorism, the election system, and the psychology of awards vs monetary incentives.


University of Basel (Universität Basel)

The University of Basel has an international reputation of outstanding achievements in research and teaching. Founded in 1460, the University of Basel is the oldest university in Switzerland and has a history of success going back over 550 years. As a comprehensive university offering a wide range of high-quality educational opportunities, the University of Basel attracts students from Switzerland and the entire world, offering them outstanding studying conditions as they work towards their bachelor’s, master’s or PhD degrees. Today, the University of Basel has around 13,000 students from over a hundred nations, including 2,700 PhD students. The University of Basel has seven faculties covering a wide spectrum of academic disciplines. At the same time, the university has positioned itself amidst the international competition in the form of five strategic focal areas: Life Sciences, Visual Studies, Nanosciences, Sustainability and Energy Research and European and Global Studies. (Source: University of Basel)
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Original publication

Awards as Compensation

Frey Bruno S.
European Management Review
Published in 2007

Awards at Work

Susanne Neckermann, Reto Cueni and Bruno S. Frey
ZEW Discussion Paper
Published in 2012

Reading recommendations

Academic Honors and Performance

Frey Bruno S., Chan Ho Fai, Gallus Jana and Torgler Benno
Labour Economics
Published in 2014

What Price Fame?

Cowen Tyler
Published in 2000

Giving and Receiving Awards

Frey Bruno S.
Perspectives on Psychological Science
Published in 2006

Towards an Economics of Awards

Frey Bruno S. and Gallus Jana
Journal of Economic Surveys
Published in 2016

Superstar CEOs

Malmendier Ulrike and Tate Geoffrey
Quarterly Journal of Economics
Published in 2009
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