Motivating Knowledge Agents: Can Incentive Pay Overcome Social Distance?

This article studies the interaction of incentive pay with intrinsic motivation and social distance. We analyse theoretically as well as empirically the effect of incentive pay when agents have not only pro-social objectives but also preferences over dealing with one social group relative to another. In a randomised field experiment undertaken across 151 villages in South India, local agents were hired to spread information about a public health insurance programme. In the absence of incentive pay, social distance impedes the flow of information. Incentive pay increases overall agent effort and appears to cancel the negative effects of social distance.