Cowen on incentives

In this interview, Tyler Cowen, a professor of economics at George Mason University, answers why people blog and why many continue to remain in jobs even when they could potentially be making more money in a different company or job:

"Knowlege@Wharton: So we can be motivated to do a lot of work, even highly skilled work, just because it’s fun?

Cowen: Absolutely. A lot of science works on the same basis. It’s true that scientists get paid, but typically they don’t get paid more, or much more, for discovering something that will make them famous. They do it because they love science, or because they want the recognition or because they just stumble upon it. Einstein was never a wealthy man but he worked very hard. So blogging is a new form of an old idea: that people do great things for free. Adam Smith didn’t get paid much for writing Wealth of Nations, even though it’s a long book that required a lot of work. He had an inner drive to get his ideas out there."

I could not agree more. I blogged about this earlier and reiterate it here: money is not the only motivation. We are more complex than what some economists would like to think of us as. We try to optimize our rewards over a longer period of time - lower salary now might mean better opportunities in the long run. Lower salary now might mean a better learning opportunity, more job satisfaction, etc. It is a balance and each one arrives at a balance and mix of money and satisfaction and other incentives based on what makes them happy and satisfied and feel smug about themselves.