Editing Incentive (section)

=== Cultural differences in incentives ===
Studies have found that the effectiveness of pay-for-performance incentives varies across cultures. For example, one study randomly assigned people in the US, UK, China, India, Mexico, and South Africa to complete basic work tasks for money or psychological [[Nudge theory|nudges]], such as social norms.<ref>{{Cite journal |last=Medvedev |first=Danila |last2=Davenport |first2=Diag |last3=Talhelm |first3=Thomas |last4=Li |first4=Yin |date=March 2024 |title=The motivating effect of monetary over psychological incentives is stronger in WEIRD cultures |url=https://www.nature.com/articles/s41562-023-01769-5 |journal=Nature Human Behaviour |language=en |volume=8 |issue=3 |pages=456–470 |doi=10.1038/s41562-023-01769-5 |issn=2397-3374}}</ref> In general, people worked harder in response to money than the nudges, but the relative power of money was stronger in Western cultures than non-Western cultures. Similarly, researchers paid students in the US and China for getting questions correct on a math test.<ref>{{Cite journal |last=Gneezy |first=Uri |last2=List |first2=John A. |last3=Livingston |first3=Jeffrey A. |last4=Qin |first4=Xiangdong |last5=Sadoff |first5=Sally |last6=Xu |first6=Yang |date=December 2019 |title=Measuring Success in Education: The Role of Effort on the Test Itself |url=https://www.aeaweb.org/articles?id=10.1257/aeri.20180633 |journal=American Economic Review: Insights |language=en |volume=1 |issue=3 |pages=291–308 |doi=10.1257/aeri.20180633 |issn=2640-205X}}</ref> Money made students get more answers correct on the test in the US, but not in China.

These findings are consistent with cultural differences in how common pay-for-performance incentives are across cultures. Studies have found that pay-for-performance is more common among companies in individualistic cultures, such as the US and UK.<ref>{{Cite web |last=Gomez-Mejia |first=Luis R. |last2=Welbourne |first2=Theresa |date=1991-03-01 |title=Compensation Strategies in a Global Context. {{!}} EBSCOhost |url=https://openurl.ebsco.com/EPDB:gcd:1:9635505/detailv2?sid=ebsco:plink:scholar&id=ebsco:gcd:7700836&crl=c&link_origin=scholar.google.com |access-date=2025-05-06 |website=openurl.ebsco.com |language=en}}</ref><ref>{{Cite journal |last=Schuler |first=Randall S. |last2=Rogovsky |first2=Nikolai |date=1998-03-01 |title=Understanding Compensation Practice Variations Across Firms: The Impact of National Culture |url=https://link.springer.com/article/10.1057/palgrave.jibs.8490030 |journal=Journal of International Business Studies |language=en |volume=29 |issue=1 |pages=159–177 |doi=10.1057/palgrave.jibs.8490030 |issn=1478-6990|url-access=subscription }}</ref> It is unclear whether the pay structures cause the cultural differences in the effectiveness of pay-for-performance incentives or if they are a result of cultural differences.