Various explanations have been offered for why crowding out occurs.
Motivational theories On this view—sometimes referred to as
cognitive evaluation theory—the post-behavioral significance people assign to the reward determines subsequent motivation. Deci and Ryan argue that rewards can be seen to have two components: one that
controls people's behavior and thus infringes on their autonomy, and a different, status-
signaling component that enhances people's sense of competence. For instance, an employee recognition award could be seen as either the reason why an employee worked so hard in a given month (i.e. to win the award) or could be seen simply as a recognition of the employee's performance in general. If an extrinsic reward for some behavior appears to be controlling (i.e. the reason a person plausibly performed that behavior), this is argued to supplant intrinsic motivation for engaging in the behavior. Insofar, however, as the extrinsic incentive is seen not as an inducement but rather as a signal of high status or high achievement in general (e.g. a merit-based award), the incentive will engender more effort without crowding out motivation. On this account, then, the extent to which a given extrinsic incentive crowds out motivation is determined by the balance of the controlling versus status-signaling nature of the awards as perceived by the actor.
Behavioral theories Various attempts have been made by
behaviorists to explain the apparent phenomenon of crowding out in terms of reward conditioning. Behaviors that are typically thought to be intrinsically motivated, these theories argue, are actually motivated by the social praise they tend to engender.
Dickinson argues that part of the reason why these behaviors are socially praised is precisely because they are not connected with any particular reinforcers. When a person helps someone else, he argues, he receives praise in part because there does not seem to be any specific private incentive for doing helping. Thus, the introduction of a specific reinforcer such as an extrinsic reward lowers the public praise, Dickinson argues. If the loss of praise is larger than the size of the specific reinforcer, she argues, then free-choice selection of that behavior will decrease. Hence, what appears as crowding out of intrinsic motivation can instead be explained, according to these theories, by shifting perceptions and incentives.
Signals to actors In a context of uncertainty or
information asymmetry, rewards can signal important information to the actor. If the person offering the reward (the "principal") is presumed to know something more about the task than the person to engage in the activity (the "agent"), then offering an extrinsic reward can be seen as revealing the principal's distrust as to whether or not the action would be taken without the inducement. In this view, offering a reward is a signal that either the principal knows the task is unpleasant and otherwise would not be completed, or that the principal does not trust that the agent is sufficiently motivated without such incentives. On either interpretation, agents are understood to infer something negative about the activity which lowers their willingness to engage in it without additional incentive. An implication of this view is that, under certain conditions,
crowding in might occur. If an activity were valued poorly by an agent, an especially high premium offered might signal to the agent that this task is more valuable than the agent previously considered.
Signals to observers about actors' motivations Additionally, the presence or absence of extrinsic incentives can be interpreted by observers as signals of an agent's motivations for engaging in some activity. To the extent that agents are concerned with cultivating an image as an altruist, the presence of extrinsic incentives can lower interest in engaging in some task that might signal non-
altruistic motives. == Debate and meta-analyses ==