Economy

For A Big Bonus, We'll Try Harder, But Fail More Often

In his new book, The Upside of Irrationality: The Unexpected Benefits of Defying Logic at Work and at Home, Dan Ariely, the James B. Duke Professor of Behavioral Economics at Duke University, focuses on our relationship with compensation.

Ariely concludes that, "far from being the Mr. Spock-like rational creatures of classical economics, we have a lot more in common with another TV icon: Homer Simpson."

Earlier today, he spoke with NPR's Robert Siegel about what motivates us, and how incentives can change productivity and creativity. The interview will air later today on All Things Considered.

In one of Ariely's experiments, which promised workers varying amounts of compensation based on success, he discovered that people tend to try harder for larger rewards, but they succeed to a much lower degree.

"It turns out that money is kind of a two-edged sword," Ariely told Siegel. "It is a motivator. When we get more money, we want to do better. But it is also a stressor in the sense that more money creates more stress."

When it comes to creativity and problem-solving and thinking and memory and concentration, it turns out that you can't will yourself to a higher level of performance.

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