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How Extrinsic Rewards turn off our Social Brain

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How Extrinsic Rewards turn off our Social Brain

(Below is a snippet of Gamification Book: Actionable Gamification – Beyond Points, Badges, and Leaderboards. If you like this blog post, you will LOVE the book.)

Giving people financial rewards through Core Drive 4: Ownership & Possession doesn’t simply reduce our intellectual curiosity (Core Drive 7) and our creative problem-solving skills (Core Drive 3), it also shifts the focus away from our social brain (Core Drive 5) to our economical brain. Depending on the actual goals of the gamification designer, this could become detrimental to the intended outcome.

In Predictably Irrational, Dan Ariely makes it clear that these aren’t just two different ways of thinking; they are completely different behavioral modes that make us act differently in everything we do. Ariely defines these differences as Social Norms versus Market Norms to show the significant contrast between these paradigms.

For example, Ariely demonstrated that people were often very willing to perform mundane tasks, leave candy for others, perform free legal work, teach martial arts, solve difficult puzzles, move large pieces of furniture, and work on open source projects, all without any material reward. This was because their brains were following a social norm mode, “I will do them a favor as we appreciate each other. We take care of each other when we can.”

But once we offer money for the service, the brain immediately shifts into a market mode norm. If we offer as little as 1¢ for the service, people will feel insulted with the amount of money and not only refuse to perform the activity, but question the social relationship itself. The social ties weaken and break, with everything boiling down to: “Are you paying me my worth to do this for you?”

Suppose you were willing to do me a favor for free because you genuinely take pleasure in helping me improve my situation. But then I asked you, “Can you do this for me? I can pay you $5.” You are not likely to think that you are getting the pleasure of helping me out as initially intended, and making an extra $5 bonus on top of it. Our brains are either using the Social Norms, or the Market Norms. Once I offer to pay you, you begin to think, “My time is worth much more than $5. This is insulting.”

Extrinsic Motivation reduces Human Empathy

Ariely adds another hypothetical scenario to drive this point home: what would happen if you offer to pay your mother-in-law a few hundred dollars for hosting a great Thanksgiving meal and a wonderful evening? Immediately, you transition the situation from Social Norms to Market Norms, and it is not difficult to predict that she would respond quite poorly to this generous offer.

After conducting a few experiments, Ariely found that when the price of delicious Lindt chocolate truffles shifts from 10¢ to 5¢ to 1¢, demand from university students increased by 240 percent and then by 400 percent, which fits well into traditional economic models.

However, when the price went from 1¢ to free, instead of a massive increase in demand, as basic economic theory would predict, the number of truffles taken (without cost) by each student was immediately reduced to one. In the end this led to an overall decrease in demand by 50 percent.

When the price was shifted from 1¢ to free, our brains shifted from the Market Norm of “This is a great deal! I must get more!” to the Social Norm of, “I don’t want to be a jerk and take too many. What if it runs out and other people don’t get to have any?”

In the Octalysis Framework, this is a perfect example of Left Brain Core Drive 4: Ownership & Possession shifting to Right Brain Core Drive 5: Social Influence & Relatedness. When you incentivize people with money, they lose some of their social altruism and generosity, which means that they are not selflessly collaborating and sharing useful information with one another as much as they would otherwise. They become more like rational economic calculators and tend to work more only when the pay justifies it. (Assuming of course, that there aren’t much stronger Right Brain Core Drive forces within the environment.)

Fooling our Brains with Gifts instead of Cash

An interesting caveat is that when you offer gifts instead of cash, experiments reveal that the rules of Social Norms still apply. Your mother-in-law would unlikely become offended if you brought a nice wine as a gift for the Thanksgiving Dinner. This is because “Gifting” (or Social Treasures) is still mostly in the realm of Core Drive 5: Social Influence & Relatedness, so the interaction is still intrinsic in nature.

However, the moment you mention the dollar amount of the gift, the Social Norm shifts to a Market Norm once again. In another experiment by Dan Ariely, simply mentioning something along the lines of, “Can you help with something? I’ll give you this 50¢ chocolate bar,” caused applicants to immediately switched to their Market Norm mode and interpreted the statement as an insult.

But when the experimenter simply said, “Can you help with something? I’ll give you this chocolate bar,” many people were eager to help because they were still operating within the Social Norm.

Exploring this further, let’s look at a dating scenario. When you buy gifts for your date, once you make statements such as, “I would be happy to buy you this $80 steak!” or even “I’ve spent quite a bit of money on our dates now. Perhaps we should take this to the next level?” the situation shifts dramatically. The person might become offended, because you have transitioned the Social Norm to a Market Norm. You likely won’t accomplish the goals you intend, since the potential partner will likely prefer to treat your relationship as a “social” one instead of a “market exchange” one. Here again, when applying a Left Brain Core Drive technique, the Right Brain Core Drive becomes diminished.

Of course, our brains are quite easy to fool. A clever device that bypasses this gifting inconvenience is known as the gift card. Though in reality it functions like cash, since the value is stored on a card and can only be used at a certain place, people treat it as a gift. Sometimes they even include the receipt so that the recipients can even return the gift card for cash! However, since it is still a gift, not a real payment, people accept it without shifting to Market Norms – unless you say, “Here is a gift card that is worth $50. I would like you to have it.”

The Chinese and some Asian cultures also disguise their cash gifts with “red envelopes.” Though it is still just pure cash, the envelope represents good luck, and therefore it is received as a Social Treasure. But once the person takes the cash out from the envelope and gives it to another, the exchange becomes a Market Norm, and is therefore insulting again. After all, people don’t like to be treated as beggars.

Better put a red envelope around it or invest in a gift card.

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