Economics, Sociology, Extrinsic and Intrinsic Motivation, and Variance, or, Advice for the Tribal Social Scientist

Someone whose name I've forgotten said that economics is all about how people act rationally and sociology is all about how they don't. That's catchy, but not very helful, because it makes you think about the exact meaning of the term "rational", and before you know it, you're writing a book. Let me propose instead (and of course I'm using the broad brush here) that economics is how people are driven by extrinsic motivation and sociology is about how they're driven by intrinsic motivation.

Of course, people are driven by both, so a good social scientist should consider both. But there's more to be said about the two. Extrinsic and intrinsic motivation are functional equivalents, and the less variance there is in one of the two, the more variance in your dependent variable the other is going to explain.

That's a little abstract, so here's an example. For the purposes of the example, please accept the simplification that the two types of motivation are completely independent of each other.

Consider a company unit in which variance in intrinsic work motivation is low, and the mean is also low - that is, everybody's a lazy bastard. Then variance in extrinsic motivation will explain a lot of variance in behaviour. That is, those who have a higher incentive, such as financial rewards, to work, will work harder, while those that have little incentive will work little (high variance, middling mean).

Now consider a company unit in which variance in intrinsic work motivation is low, and the mean is high. Here, everyone will work hard (low variance, high mean), and differences in incentives will have little effect.

Next, start by thinking about extrinsic motivation. If extrinsic motivation's variance is low with a low mean (everyone gets minimum wage, regardless), then how hard people work will be driven by their intrinsic motivation (high variance, middling mean).

Finally, if extrinsic motivation's variance is low with a high mean, everyone will try hard (low variance, high mean).

What does that leave us with? First, if variance in one independent variable is lower, then variance in the other dependent variable will explain more of the variance in the dependent variable. Admittedly, that's a mathematical necessity, and not a new insight. More specifically, it means that economists who want to stick it to the guys in the other building had better select topics where variance in people's intrinsic motivation is low, while sociologists who want to teach those arrogant dicks in the Adam Smith building a lesson should select reasearch areas in which variance in people's extrinsic motivation is low.

And if you own a company, you ought to put a lot of time into selecting people with high intrinsic work motivation, and also think hard about how to taylor rewards to employees' behaviour. You'll want to do both, because you'll be perfect at neither.

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