Incentivizing learning – the crowding-in effect

Duration 2004–2019

Institute Institute for Strategy, Technology and Organization Department Department of Management, Department of Strategy and Innovation

Margit Kastner, Robert Krikawa, Karl Ledermüller, Michaela Nettekoven, Markus Schelenz, Michael Schiffinger

Research into the study habits of students has shown that while they do engage with course content, almost 90% study most intensely right before an exam. Here students express the very human tendency to procrastinate and put in the most work at the last minute.

These kinds of study habits could also be described as “bulimia learning” since students learn the materials quickly, but forget them just as rapidly. However, this way of studying is not enough to build up a solid base of knowledge, as research on the learning and forgetting curves has shown.

The analysis of various measures to improve students’ learning success demonstrated the positive effect of small incentives on increasing students’ autonomous motivation to study.

The research investigated possible ways of encouraging students to engage with course content more frequently outside the lecture hall to help them achieve optimal learning success. A number of experiments were carried out in higher education teaching practice, and the effects of a number of measures were analyzed. One experiment that used small incentives to increase motivation achieved a breakthrough. Students were offered small rewards to encourage them to complete homework assignments, and any changes in learning success were measured. In a process called “nudging,” the incentives used were so small that they could not justify the work input. When asked directly how they felt about the size of the incentives, 97.5% of students reported they “would not lift a finger for them.” Still, these incentives yielded unexpected results. An analysis of the experiment showed that four times as many students completed a homework assignment when motivated by a small reward and voluntarily went on to complete many more exercises. Apparently, these tiny rewards provided the activation energy students needed to get started on an assignment. Once they began working, students were more likely to continue and get beyond “bulimia learning” since, as the saying goes, “appetite comes with eating.”

The findings on the crowding-in effect were used to revise university course design and improved students’ learning success. Small incentives are now being used in other WU courses and at the University of Salzburg.

Until the 2010s, the motivation “crowding-out” effect of incentives was a central issue in behavioral studies. The crowding-out effect describes how incentives can cause children and adults to lose interest in a given activity at school or work. These research findings, in contrast, show that small incentives can encourage students to voluntarily complete homework assignments (the “crowding-in effect”). In numbers, the quality of students’ homework in the courses involved in the study rose by 10%, and they completed 1.5 times as many exercises for which there was no reward. These findings on incentives have been incorporated into the design of various WU courses in subjects like finance, marketing, and innovation. They were also presented to lecturers in higher education, instructors at colleges of education, and heads and managers of academic programs, and were reported in practitioner-oriented journals such as the

Harvard Business Review as well as in national newspapers like the Wiener Zeitung and the Kronen Zeitung, and broadcast on the radio. As a result, other educational institutions (including the University of Salzburg) have also integrated these findings into their course designs. As designing successful study incentives has taken on new significance for university funding in Austria (which will depend in part on the number of academically active students as of 2019), their impact on higher education teaching practice is now particularly important. Workshops will be held for both instructors (e.g. at the universities of Graz, Klagenfurt, and Salzburg) and students (e.g. at WU Vienna). On a more abstract level, the research findings contribute to improving learning and education, and, consequently, to a better qualified workforce for the future (SDG 4 “Quality Education” and SDG 8 “Decent Work and Economic Growth”).

Investigation of the effects of small incentives on learning success

Insights about the positive effects of small incentives on students’ autonomous motivation

Improvement of students’ learning success by incorporating small incentives into course designs