In this post, Sumit Mishra discusses incentives. He offers links to research on incentives that show time and again that monetary incentives can backfire. Economists need to heed this advice, which they often honor on the breach. Here is a pithy quote from the last paragraph, but I do recommend reading the entire post.
Research shows that an optimal mix of monetary and non-financial incentives can be effective in designing public programmes. Non-financial rewards can help whenever paying cash doesn’t work. Identifying which one of these works remains a challenge, though.
The curious incident of DD on the Web 