The article "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out" by Bruno S. Frey and Felix Oberholzer-Gee examines the impact of monetary incentives on intrinsic motivation, particularly in the context of local opposition to undesirable projects, such as nuclear waste repositories. The authors argue that while price incentives can be effective in encouraging support for certain projects, they may also reduce intrinsic motivation, leading to a phenomenon known as "motivation crowding-out." This occurs when external rewards undermine the internal drive to act altruistically or out of civic duty. The paper builds on the earlier debate initiated by Richard M. Titmuss, who suggested that monetary compensation could diminish an individual's sense of civic duty. While economists initially assumed that price incentives would simply add to altruistic behavior, recent theoretical developments in social psychology have shown that intrinsic motivation can be partially destroyed by external rewards. This leads to a situation where the effectiveness of price incentives is reduced, and in some cases, even reversed. The authors apply this theory to the "Not In My Backyard" (NIMBY) problem, where local residents may oppose the siting of noxious facilities despite their potential social benefits. Using an empirical study of Swiss residents, they find that offering monetary compensation for accepting a nuclear waste repository significantly reduces the willingness to host the facility. This effect is attributed to the crowding-out of intrinsic motivation, where the promise of financial reward diminishes the citizens' civic duty to support the project. The study also explores the determinants of support for such projects, finding that factors like perceived risk, negative economic impacts, and the quality of the site selection process influence acceptance. The results suggest that while compensation can be used to gain support, it may not be as effective as previously thought due to the crowding-out effect. The authors conclude that in areas where intrinsic motivation is important, price incentives should be used cautiously, as they may not achieve the desired outcomes and can even reduce support. The findings have implications for both economic theory and policy, highlighting the limitations of monetary compensation in rallying support for socially desirable but locally unwanted projects.The article "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out" by Bruno S. Frey and Felix Oberholzer-Gee examines the impact of monetary incentives on intrinsic motivation, particularly in the context of local opposition to undesirable projects, such as nuclear waste repositories. The authors argue that while price incentives can be effective in encouraging support for certain projects, they may also reduce intrinsic motivation, leading to a phenomenon known as "motivation crowding-out." This occurs when external rewards undermine the internal drive to act altruistically or out of civic duty. The paper builds on the earlier debate initiated by Richard M. Titmuss, who suggested that monetary compensation could diminish an individual's sense of civic duty. While economists initially assumed that price incentives would simply add to altruistic behavior, recent theoretical developments in social psychology have shown that intrinsic motivation can be partially destroyed by external rewards. This leads to a situation where the effectiveness of price incentives is reduced, and in some cases, even reversed. The authors apply this theory to the "Not In My Backyard" (NIMBY) problem, where local residents may oppose the siting of noxious facilities despite their potential social benefits. Using an empirical study of Swiss residents, they find that offering monetary compensation for accepting a nuclear waste repository significantly reduces the willingness to host the facility. This effect is attributed to the crowding-out of intrinsic motivation, where the promise of financial reward diminishes the citizens' civic duty to support the project. The study also explores the determinants of support for such projects, finding that factors like perceived risk, negative economic impacts, and the quality of the site selection process influence acceptance. The results suggest that while compensation can be used to gain support, it may not be as effective as previously thought due to the crowding-out effect. The authors conclude that in areas where intrinsic motivation is important, price incentives should be used cautiously, as they may not achieve the desired outcomes and can even reduce support. The findings have implications for both economic theory and policy, highlighting the limitations of monetary compensation in rallying support for socially desirable but locally unwanted projects.