Our trust conceptualizations have benefited from discussions with Ellen Berscheid and Larry Cummings of the University of Minnesota. The authors also thank three anonymous reviewers from the Organizational Behavior division of the 1996 meeting of the Academy of Management for their comments on an earlier version of this paper. THE MEANINGS OF TRUST What does the word ‘trust ’ mean? Scholars continue to express concern regarding their collective lack of consensus about trust’s meaning. Conceptual confusion on trust makes comparing one trust study to another problematic. To facilitate cumulative trust research, the authors propose two kinds of trust typologies: (a) a classification system for types of trust, and (b) definitions of six related trust types that form a model. Some of the model’s implications for management are also outlined. 2 THE MEANINGS OF TRUST “...trust is a term with many meanings. ” (Williamson, 1993: 453) “Trust is itself a term for a clustering of perceptions. ” (White, 1992: 174) Scholars and practitioners widely acknowledge trust's importance. Trust makes cooperative endeavors happen (e.g., Arrow, 1974; Deutsch, 1973; Gambetta, 1988). Trust is a key to positive interpersonal relationships in

Employees are motivated intrinsically as well as extrinsically. Intrinsic motivation is crucial when tacit knowledge in and between teams must be transferred. Organizational forms enable different kinds of motivation and have different capacities to generate and transfer tacit knowledge. Since knowledge generation and transfer are essential for a firm s sustainable competitive advantage, we ask specifically what kinds of motivation are needed to generate and transfer tacit knowledge, as opposed to explicit knowledge.

Israeli National Insurance Institute for careful work and assistance analyzing post-secondary enrollment data.

Age differences in intrinsic and extrinsic motivation and the relationships of each to academic outcomes were examined in an ethnically diverse sample of 797 3rd-grade through 8th-grade children. Using independent measures, the authors found intrinsic and extrinsic motivation to be only moderately correlated, suggesting that they may be largely orthogonal dimensions of motivation in school. Consistent with previous research, intrinsic motivation showed a significant linear decrease from 3rd grade through 8th grade and proved positively correlated with children’s grades and standardized test scores at all grade levels. Extrinsic motivation showed few differences across grade levels and proved negatively correlated with academic outcomes. Surprisingly few differences based on children’s sex or ethnicity were found. Causes and consequences of the disturbingly low levels of motivation for older, relative to younger, children are discussed.

addresses are <ugneezy@ucsd.edu>, <sm3087@columbia.edu>, and <pedro.rey@uab.cat>. 2 Economists often emphasize that "incentives matter." The basic "law of behavior" is that higher incentives will lead to more effort and higher performance: principals who are employers, for example, often use extrinsic incentives to motivate their employees. In recent years, the use of incentives in behavioral interventions has become more popular. Should students be provided with financial incentives for increased school attendance, for reading, or for better grades? Will financial incentives encourage higher contributions to public goods, like blood donations? Should programs to reduce smoking or to encourage exercise include a monetary incentive? These applications of incentives have provoked heated debate. Proponents of using incentives in behavioral interventions argue, for example, that monetary incentives can be helpful in getting people to study or exercise more. Opponents believe that using incentives in those areas could backfire, because extrinsic incentives may in some way crowd out intrinsic motivations that are important to producing the desired behavior. This paper proceeds by discussing some general aspects of how extrinsic incentives may come into conflict with other motivations. For example, monetary incentives from principals may change how tasks are perceived by agents. If incentives are not large enough, this change in perception can lead to undesired effects on behavior. In other cases, incentives might have the desired effects in the short term, but they still weaken intrinsic motivations. Thus, once the incentives are removed, people may pursue the desired outcome less eagerly. To put it in concrete terms, an incentive for a child to learn to read could achieve that goal, but then be counterproductive as an incentive for students to enjoy reading and seek it out over their lifetimes. The following sections of the paper then discusses the research literature on three important examples in which monetary incentives have been used in a non-employment context to foster the desired behavior: education, increasing contributions to public goods, and helping 3 people change their lifestyles. The conclusion sums up some lessons on when extrinsic incentives are more or less likely to alter such behaviors in the desired directions. The Potential Crowding Out Effect vs. Extrinsic Incentives Monetary incentives have two kinds of effects: the standard direct price effect, which makes the incentivized behavior more attractive, and an indirect psychological effect. In some cases, the psychological effect works in an opposite direction to the price effect and can crowd out the incentivized behavior. Several papers in recent years have shown that such crowding-out effects can be handled with fairly standard economic modeling of principal-agent problems that use non-standard assumptions. This type of model illustrates some principal channels through which incentives can affect agents' decisions about effort. One channel is information. In a private-good context without image concerns and in which the principal is better informed than the agent, the principal chooses a reward level based on several factors, including how the principal views the difficulty 4 or attractiveness to be performed, and how the principal views the intrinsic motivation or ability of the agent. For example, offering incentives for improved academic performance in schools may signal that achieving a specific goal is difficult, that the task is not attractive, or that the agent is not well-suited for it (and thus needs the additional incentive of a reward). Alternatively, offering incentives could signal that the principal does not trust the agent's intrinsic motivation. This signal will be "bad news" for the agent and can lower the intrinsic motivation of the agent to undertake the task. A second channel for crowding out appears when extrinsic incentives reduce other motives for undertaking the task. For example, if a higher personal benefit associated with a certain level of prosocial behavior affects the reputational value attributed to a person's intrinsic and extrinsic motivation. That is, decreasing the signal about social preferences and increasing the signal about a person's greediness may result in lower image motivation. In such cases, offering higher material rewards may backfire if the effect on image motivation is stronger than the standard price effect. This effect may depend on the extent to which these signals are public. These channels illustrate some basic properties of behavioral effects of incentives and create implications for the design of incentives. Crowding Out in the Short Run When Incentives Are In Place The psychology literature contains many examples of incentives that reduce effort or motivation to undertake a task during the short-run when such incentives are in place. Early attempts to understand what motivates people tended to focus on two areas: 1) basic biological needs of survival and procreation, and 2) extrinsic rewards or punishment. However, in the early 1970s, psychologists began exploring the nature of intrinsic and extrinsic motivation, particularly 5 the assumption that intrinsic motivation always pushes behavior in the same direction as extrinsic motivation (see the survey of this literature in A general theme of this work was that incentives contain information relayed from the principal to the agent, and such information can provoke unexpected effects on behavior. For example, Frey and Oberholzer-Gee (1997) show that offering members of a community a large monetary compensation for a nuclear waste site's presence, the principal signals that the risks involved are high, and thus community members may be less willing to accept the plant. Agents will draw inferences from both the existence and size of the offered incentives. The definition of what constitutes "small" and "large" incentives depends on the case, but the message seems to be clear; as Gneezy and Rustichini's (2000a) title suggests, "Pay enoughor don't pay at all." In one of their experiments, Gneezy and Rustichini (2000a) present field evidence that high school students who collected donations for a charity in a door-to-door fund raising campaign, invested more effort when they were not compensated for it than when a small compensation was offered to them. Once compensation for effort was offered, higher payment resulted in higher effort. For most tasks, if incentives are large enough, their direct price effect will be larger than the crowding-out effect in the short run. 1 However, incentives can backfire even in the short run in many situations. Crowding out After Incentives Are Removed 1 Interesting exemptions are when incentives are so high that people may "choke under pressure" (Ariely et al, 2009). 6 If incentives signal some form of "bad news," agents who receive incentives will update their beliefs about the task, their own type, or their assessment of their principal. As a result, their motivation to perform the task without the additional incentive can be reduced permanently. Because the standard incentive effect is gone in the long run (we define the long run as after the incentives are removed), effort will be lower than it was before extrinsic incentives were offered. In educational settings, negative long-run effects on students' joy of learning might be especially troublesome, as incentive programs are often only temporary and are restricted to certain tests/tasks. In providing incentives for changing people's lifestyle choices or for encouraging people to contribute to public goods, negative long-run effects on (intrinsic) motivation are especially problematic. For example, Meier (2007a) shows in a field experiment that although a matching incentive (25% or 50% match rate) increases donations in the short run, donations decrease below the pre-incentive period in the long run. The net effect over time of providing the matching incentive is even negative. Gneezy and Rustichini (2000b) provide an example in which behavior is not just a function of the current incentives, but may be affected by the incentives offered in previous periods. In their experiment, a daycare began charging late-coming parents a small fine of 10 New Israeli shekels (about $3 at the time). The result was an increase in the number of late pickups even in the short run, that is, while the incentives were present. One interpretation of this result is information: the parents did not initially know how important it was to arrive on time. The contract specified that they should pick their children up on time but failed to specify the penalty if they did not. The distribution of the parents' beliefs regarding how bad it was to be late may have included bad scenarios (for example, "the teacher will make my child suffer"). Once a small fine was imposed, the contract was complete in that being late was priced. The relatively 7 small fine signaled to parents that arriving late was not that important. This new piece of information that it was not so bad to be late did not disappear once the fine was removed. Indeed, This crowding-out discussion does not, of course, mean that using incentives to obtain behavioral changes will always be counterproductive. Sometimes it is enough that the incentives work in the short run. Even in the long run, sometimes incentives will foster good habits. Incentives in Education It may seem that designing incentive mechanisms to improve education should be relatively straightforward. Students may invest too little effort in their own education because they overly discount the future, have time-inconsistent preferences, or underestimate the return on education. Extrinsic incentives can then provide immediate returns that provide an extra 8 motivation to study. Similarly, incentives can give parents and teachers additional reasons to put

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The authors argue against a purely behavioral definition of praise as verbal reinforcement in favor of the view that praise may serve to undermine, enhance, or have no effect on children’s intrinsic motivation, depending on a set of conceptual variables. Provided that praise is perceived as sincere, it is particularly beneficial to motivation when it encourages performance attributions to controllable causes, promotes autonomy, enhances competence without an overreliance on social comparisons, and conveys attainable standards and expectations. The motivational consequences of praise also can be moderated by charac-teristics of the recipient, such as age, gender, and culture. Methodological considerations, such as including appropriate control groups and measuring postfailure outcomes, are stressed, and directions for future research are highlighted. Praise, like penicillin, must not be administered haphazardly. There are rules and cautions that govern the handling of potent medicines— rules about timing and dosage, cautions about possible allergic reac-tions. There are similar regulations about the administration of emo-tional medicine. (H. Ginott, 1965, p. 39) On the whole, we as a society seem to believe that praise has

I analyze a program implemented in Texas schools serving underprivileged populations that pays both students and teachers for passing grades on Advanced Placement (AP) examinations. Using a difference-in-differences strategy, I find that program adoption is associated with increased AP course and exam taking, increases in the number of students with high SAT/ACT scores, and increases in college matriculation. The rewards don’t appear to distort behaviors in undesirable ways, and I present evidence that teachers and students were not simply maximizing rewards. Guidance counselors credit the improvements to greater AP access, changes in social norms towards APs, and better student information. I.

When motivating others during uninteresting activities, people typically use ex-trinsic contingencies that promote controlling forms of extrinsic motivation. In contrast, we investigated a motivational strategy that could support another per-son’s capacity to personally endorse and value the effort he or she put forth during the uninteresting activity. That strategy is the provision of an externally provided rationale when communicated in an autonomy-supportive way. In two studies, we tested and found support for a motivational mediation model, based on self-determination theory, in which the presence of such a rationale (vs. its absence) adds to participants ’ identification with the task’s personal value which, in turn, explains participants ’ subsequent effort. These studies suggest that extrinsically motivated behaviors can become self-determined through the process of identi-fication and that the promotion of this identification experience depends on the presence of a rationale that is communicated in an autonomy-supportive way. KEY WORDS: internalization; identified regulation; extrinsic motivation; rationale; self-determination; autonomy support.

ABSTRACT This paper discusses the impact of the dynamics of motivation on new organizational forms that are suited to forge value-creating knowledge transfers in teams and between organizational units and functions. Our aim is to develop the management of motivation as a source of distinctive firm competences. We argue that motivation is an endogenous variable and introduce it as a crucial link into the theory of the firm. Balancing intrinsic and extrinsic motivation helps to overcome social dilemmas in firms that are not solvable by hierarchical authority. Integrating the dynamics of motivation is a step to a more comprehensive theory of organization. It links organizational economics to the knowledge-based perspective.