Forgoing Earned Incentives to Signal Pure Motives

Policy makers, employers, and insurers often provide financial incentives to encourage citizens, employees, and customers to take actions that are good for them or for society (e.g., energy conservation, healthy living, safe driving). Though financial incentives are often effective at inducing good behavior, they have been shown to have self-image costs: those who receive incentives view their actions less positively due to the perceived incompatibility between financial incentives and intrinsic motives. We design and test a novel intervention that allows organizations and individuals to resolve this tension: we use financial rewards to kick-start good behavior and then offer individuals the opportunity to give up some or all of their earned financial rewards in order to boost their self-image. Two preregistered studies — an incentivized online experiment (N=454) on prosocial behavior and a large field experiment (N=17,968) on exercise — provide evidence that emphasizing the intrinsic rewards of a past action leads individuals to forgo or donate earned financial rewards. Our intervention allows individuals to retroactively signal that they acted for the right reason, recasting perceptions of their motives and consequently improving their self-image. We call this psychological process motivation laundering. We provide the first evidence of motivation laundering and discuss its implications for the design of incentive systems and behavioral change.