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This text poses a challenge to traditional economic theory, arguing that people do not act in expectation of monetary gain alone, nor do they work solely to get paid. It aims to show that higher monetary compensation crowds-out motivation, and offering higher pay makes people less committed to their work, and may reduce their performance. The first part of the book examines the crowding-out effect and the motivational spill-over effect. A large number of applications to constitutional questions, various policy issues and the organization of firms is explored in the second part. In the last part is a discussion of the substantial consequences for policy making and economic theory.
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