Incentive and Reward: What’s the Difference?

This article is an excerpt from the Shortform book guide to "Tiny Habits" by BJ Fogg. Shortform has the world's best summaries and analyses of books you should be reading.

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Are incentives and rewards the same thing? What is the key difference between the two concepts?

Incentives and rewards are often used interchangeably, however, they are not the same thing. Incentives are ways to encourage a particular behavior with benefits that can appear in the future. In contrast, a reward needs to occur either while the behavior is happening or very shortly afterward. The difference is timing.

Keep reading for a more thorough analysis on the difference between incentive and reward.

Incentives and Rewards

Like “goal,” the word “reward” is conceptually fuzzy, and its technical meaning is frequently lost in translation between academic research and self-help books. Rewards and incentives are often used interchangeably but they do not mean the same thing.

For many people, “If I go to the gym now, I’ll watch a movie tonight” is a reward. But in the technical sense, this isn’t the case.

It helps to distinguish between “incentives” and “rewards.” The difference is timing. Incentives are ways to encourage a particular behavior. The benefit can appear well into the future. Examples of incentives are:

  • “If I keep the kitchen counter tidy all week, I’ll buy that new blender I’ve been eyeing in the store.”
  • “If you sell 100 products this month, you’ll get a 20% sales bonus.”

Incentives can certainly motivate you to do something, but they don’t have a direct effect on your brain.

Rewards are tied to the behavior in real time: You take a bite of chocolate and a delicious taste fills your mouth, or you finish a presentation and the audience begins to clap.

Rewards need to occur either while the behavior is happening or very shortly afterward (ideally within milliseconds). This is because dopamine is metabolized quickly in the brain.

Incentive and Reward: What’s the Difference?

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