Financial reward undermines intrinsic incentives.

Kurayama et al. measure brain activity during conditions of apparent intrinsic and extrinsic motivation to show striking evidence for a phenomenon often noted in social psychology — namely, extrinsic incentives (pay) can undermine intrinsic incentives (fun).

Contrary to the widespread belief that people are positively motivated by reward incentives, some studies have shown that performance-based extrinsic reward can actually undermine a person's intrinsic motivation to engage in a task. This “undermining effect” has timely practical implications, given the burgeoning of performance-based incentive systems in contemporary society. It also presents a theoretical challenge for economic and reinforcement learning theories, which tend to assume that monetary incentives monotonically increase motivation. Despite the practical and theoretical importance of this provocative phenomenon, however, little is known about its neural basis. Herein we induced the behavioral undermining effect using a newly developed task, and we tracked its neural correlates using functional MRI. Our results show that performance-based monetary reward indeed undermines intrinsic motivation, as assessed by the number of voluntary engagements in the task. We found that activity in the anterior striatum and the prefrontal areas decreased along with this behavioral undermining effect. These findings suggest that the corticobasal ganglia valuation system underlies the undermining effect through the integration of extrinsic reward value and intrinsic task value.