Incentives shape a person’s method of action. Consequently, when speaking of basic human incentives in the field of economics, we refer to personal financial decisions, to the assessment of the future in relation to the present (savings vs. investment), business decisions (investment, budgeting, financing, allocation of dividends) and issues to do with collective courses of action, taxation and the role of the state. Human incentives are deeper human forces shaping behaviors without a directly observable relation between incentives and the final (financial) decisions mentioned above.

It is difficult to locate direct causal relations between incentives and financial outcomes. Thus, a nonfinancial incentive (i.e., megalothymia) can eventually be the motivating force for making a financial decision (i.e., an investment decision) as can the subject’s aspiration to become wealthier, which could be considered as a a purely financial incentive. In approaching the nature of human incentives, we could start by saying that cultural dimensions (of society and the individual) shape the values of life (natural, internal, normal) which in turn affect the formation of those incentives.

The paper’s aim, initially, is to examine what the basic forces that affect human economic action are, what constitutes the individual’s behavioral identity—and, by extension, their social identity—and how these relate to human incentives. In this context, social identity includes a range of aspects such as the person’s perception about environmental security, the basic elements of social identity (megalothymia, religion, altruism, etc.), demographics and financial behavior. Subsequently, the extent and the ways in which social identity affects the formation of human incentives are addressed.

The empirical data concern Greek society in the 2019–2020 period. We treat the two years as one. It is noted on the basis of closely allied research (Petrakis et al., 2021) that the basic behaviors of individuals within the two years do not significantly vary, evidently because the appearance of COVID-19 in 2020 is considered a temporary, exogenous event.

The main conclusion is that particular traits of social identity do indeed shape human incentives. This finding raises questions regarding policymaking that could be put in place in order to influence the operation of the economy and financial decision-making.

The paper’s structure is as follows: in part 2, the basic traits of human economic behavior are described as well as how social identity is formed. This part also explores how the relation is organized between, on the one hand, human behavior and social identity and, on the other, human incentives. In part 3, the selection of variables is analyzed. In part 4, the methodology and the empirical findings are presented. Finally, in part 5, there is a discussion of the evidence.

The economic thinking on how incentives come about concerns the operation of the economy and centers on expected utility theory (Kahneman and Tversky, 1979) which in turn is based on rational choice (Briggs, 2014). Thus, the “motives” of human behavior and the “goals” of human beings are revealed.

Not all individual motives follow a strictly optimizing/maximizing tendency, nor, of course, does everyone possess the same ability—cognitive and otherwise—to analyze information about the state of the world. Even more importantly, it is not at all certain on the basis of the research undertaken that everyone agrees with the aspect of the maximization of utility or wealth. Additionally, competition and signaling in circulation in the markets and in society can create so much confusion that the forces of restoration to a state of balance may not be in a position to operate, or not within the requisite time period.

In order to measure the concept of social identity, an approach based on detailed interviews was taken (Kanzola and Petrakis, 2021). The major issue is the wording of the questions used in the field research, which are the outcome of an interdisciplinary approach to the fields shaping social identity.

In Table 1, the variables are presented that were used to measure social identity, followed by the reasoning for selecting these particular variables. The questions describing social identity are equal to 24 in number. They fall into two sections: in the first section, the degree of satisfaction and the personal situation are presented. In the second section, are included three subsections: basic traits of the respondent, traits to do with life attitude and demographic information.

In the first section, which is concerned with the degree of satisfaction regarding life and personal situation, matters are included to do with the level of happiness (Haslam et al., 2009) and satisfaction with life (Wakefield et al., 2017), but also the person’s state of health (Haslam et al., 2009). At the same time, the feeling of security (Theiler, 2003) is considered since it forms a prerequisite for social life to thrive. Additionally, people who claim to feel safe are expected to acknowledge the importance of disciplinary rules (Smyth et al., 2015) such as the educational character of socialization agencies, and the importance of external values (McGowan et al., 2017) such as consistency in following instructions by one’s superiors.

As regards the contents of the second section, and specifically the basic traits of identity, here are included the trends of egalitarianism (Grantham, 2013; Jetten et al., 2017; Luria and Kaufman, 2017) and of megalothymia (Danilova, 2016; Mehta et al., 2017)—described by Fukuyama (Fukuyama, 2018)—which are also basic traits of social identity since they refer to ways in which a person defines themself in relation to their environment. Moreover, a common religion (Greil and Davidman, 2007) and adherence to traditions (Hayek, 1958) are included as major aspects of social cohesion. In general, once the means of earning a livelihood have been secured, then the incentives are present for the person to pursue felicity and having a good time (Wakefield et al., 2017).

As regards the life attitude, the matter is taken into consideration in the change in national identity (Fuligni and Flook, 2005; Jaspal, 2012)—i.e., the redefinition of cultural values (Hamamura, 2016; Reicher, 2004)—which may explain behaviors to do with the role of the migrants. Political self-position is used (Huddy and Bankert, 2017; Huddy and Mason, 2010) which also influences views on the role of the state in economic development (Hornung et al., 2019) as it touches on policies of wealth distribution and the welfare system. People with shared educational backgrounds may show similarities in their dispositions to protect the environment (Brieger, 2019) and to offer help to their fellow men selflessly (altruism) (Fowler and Kam, 2007).

In tandem with altruism, the degree of trust (Güth et al., 2008) people have in their fellow men is important. Social identity includes the tendency for creativity and to doing things in one’s own way (Petrakis and Kafka, 2016), which in turn relates to freedom in decision making. Additionally, the existence of friends makes a difference for the person, in the sense that they could borrow money if they found themselves in a difficult financial situation.

Finally, in terms of demographic characteristics, income status (Jetten et al., 2017), age (Zacher et al., 2018) as a factor indicative of the level of maturity, and the level of education (Kelly, 2009) are included, as a person’s training and schooling affect their beliefs and attitudes about the world and their relationships with others.

Regarding incentives, it emerges that they play a determining role in individual performance (Cameron and Pierce, 1994; Jenkins et al., 1998) and they do so without having a negative impact on intrinsic motivation (Deci and Ryan, 1985; Kohn, 1993; Pfeffer, 1998). Cerasoli et al. (Cerasoli et al., 2014) adopted a wider approach, scanning the bibliography for the psychological, educational, medical and entrepreneurial sectors, specifically focusing on intrinsic motives.

Cameron and Pierce (Cameron and Pierce, 1994) examined the role of financial incentives and concluded that, in the absence of financial incentives, the relation between intrinsic motives and performance was positive and moderately significant. When financial incentives were offered, the relation between intrinsic motives and performance was strengthened. They thus observed that the validity of intrinsic motives was not reduced but strengthened in the presence of financial incentives, boosting performance.

Other studies link financial incentives with matters to do with health coverage (Giles et al., 2014) and psychology (Byron and Khazanchi, 2012). Giles et al., (Giles et al., 2014) conclude that financial incentives relate to a range of functional behaviors to do with health, such as the cessation of smoking (short term and long term) and compliance with vaccination. Byron and Khazanchi (Byron and Khazanchi, 2012), found that individuals receiving incentives that were linked to creative performance were indeed more effective. In the present study, the determination of human incentives is attempted through a series of variables presented in Table 2.

For the selection of the variables expressing the incentives, it is argued in the present paper that financial incentives are present in the analysis, although, naturally, people are motivated by other factors as well.

The variable of surprises is used in the sense that people wish to continuously have new experiences and be in new situations in order to increase the chances of attaining life satisfaction (Chughtai, 2019), which in turn leads to increased performances (Economic Policy Institute, 2000; Liu, 1980) through pleasure in what the person is doing. The incentive of success—which relates to acknowledgement of achievements so that, through historical continuity, the person attains new successes—is connected to financial performance (Kressler, 2003). Enjoying the respect of others definitely involves the strengthening of integrity and the individual’s personality and leads to the pursuit of high performances. The absence of others’ respect leads to lower per capita income.

Finally, the wish for income equalization is an indication of people’s position on whether this is the government’s responsibility (Bilan et al., 2020). The incentive of become wealthy is a clear indicator of an attraction (or aversion) to financial gain, wealth and prosperity (Ickowitz, 2020; Mehta et al., 2017; Tobin, 1965).

This paper is based on data emerging from responses to a questionnaire distributed in Greek society in 2019–2020. There were two different phases of gathering responses to the same questionnaire, by 800 people in 2019 and 800 people in 2020. To avoid historical idiosyncrasies related primarily to 2020 (due to COVID-19), the years were treated as one, increasing the number of available observations to 1600.

The explanatory variables are fairly complex, so, for the purpose of simplification, Principal Component Analysis (PCA) was used, which reduces the number of variables describing behavioral identity, although not at the expense of the causal relations.

Observations showing extreme values with residual demands, such as “Don’t know/No response/Other”, were removed so that the full answers came to 1285 and the dimensions of the dataset were 1283 × 24. Hence, 24 components were extracted—as many as the variables used. The first five PCs represent approximately 50% of the overall data variation (Table 3). Table 3 presents the principal component analysis for the case of social identity.

Correspondingly, Table 4 presents the principal component analysis of the part variables.

It was found that the first two PCs represent 60% of data variation. The issue then was to ascertain the explanatory power of the social identity PCs in relation to the PCs of the financial incentives. To this end, we ran a regression using the 24 PCs of social identity against the first and most representative of the PCs of the incentives. It was found that in PC1 the five variables with the highest loadings (>0.30) are: surprises, to be successful, to draw pleasure from one’s activities, and the incentive to become wealthy and to earn the respect of others.

The analysis may be further pursued so as to locate those variables of social identity that define each of the part incentives that we have identified. Thus, we turned to the statistically significant PCs of social identity and we choose from among them the variables with a loading >0.30. We used these statistically significant variables as independent variables to interpret the five incentives above (Table 5, Table 6, Table 7, Table 8 and Table 9).

The results regarding the degree of explanatory value of the part variables of the incentives are shown in Table 10.

It was found that the social identity of Greek society shapes incentives so that they mainly concern postmaterialistic rather than materialistic contents (Norris and Inglehart, 2019). From analysis of the econometric results for the formation of part incentives, it is seen that the incentive of success is determined by the positive stability of tradition and the negative influence of the external values. Megalothymia and having a good time are also found to be determining factors of success.

In deriving pleasure from one’s activities, care for the environment plays a part while the variables megalothymia, having a good time and positivity towards cultural change are also present.

The incentive of become wealthy is negatively influenced by political self-position and tradition, as well as by trust and friendship, while acknowledgement of external values has a positive influence. The incentive of surprises is negatively influenced by happiness, and positively by environment, megalothymia and the desire to have a good time.

As was previously ascertained, the roles of cultural background and, more importantly, of social identity can be extremely important in shaping the nexus of incentives of human economic behavior. Thus, we introduced the concept of cultural dimensions as they manifest in social identity in order to analyze the factors shaping financial incentives.

A close interconnection has been theoretically ascertained between human incentives, needs and goals. The question which this paper has set out to answer is whether the empirical data confirm these theoretical causalities. In processing the econometric results, we are in a position to observe that all the explanatory variables of the incentives may be set within three basic groups: basic conditions, basic values (needs) and dynamism of behaviors (goals) (Table 11).

In sum, we see that the forces influencing the formation of incentives fall into three categories which correspond to the theoretical predictions that have been described; we see presence of the basic conditions and, more importantly, we also observe the presence of needs (basic values) and goals (dynamism).

The basic conditions are shaped by three variables: happiness (with a negative value), political self-position and the predisposition towards cultural change. The state of happiness enters into pleasure in one’s activities and the quest for surprises. Cultural change relates to pleasure in one’s activities. Thus, when we are happy, we draw less pleasure from what we do and we also seek surprises less often. Additionally, the more to the political right a person places themselves, the much higher is their motive to become wealthy. Additionally, the positive predisposition towards cultural change is a necessary ingredient of basic conditions.

Basic values correspond to human needs and are five in number. They are tradition, the environment, the acknowledgement of external values, trust and friendship. Tradition expresses the stability of values and affects the cultural boundaries along which incentives may develop. A caring attitude towards the environment is a basic principle of life and the acknowledgement of external values makes for the institutional boundaries along which incentives may develop. For a human being to draw pleasure from what they do, this needs to combine with a caring attitude towards the environment. Trust and friendship affect the framework in which incentives develop.

Tradition has a positive value, and the acknowledgement of external values has a negative one. The incentive of become wealthy is interpreted negatively by the conditions of tradition, trust and friendship. In actual fact, the incentive of become wealthy is a positive motivating factor for the existence of external values, while the rest of the factors have soothing characters and, as such, they exert weakening effects. Finally, the environment is once again positively combined with the individual’s predisposition to encounter new surprises. It is worth noting the significance of tradition with a changeable value, depending on the incentive on each occasion, which is also the case for the acknowledgement of external values.

The category which is of special interest is that of dynamism which includes human goals. It contains two basic variables: megalothymia and the person’s predisposition to have a good time. This section contains only variables with positive values and it affects the formation of all incentives in the same way. Perhaps here is where the main generative force resides—i.e., the nucleus of the creation of human incentives.

In sum, the two basic goals which produce the incentives of human action and imbue human behaviors with dynamism are related to two basic human pursuits: megalothymia—i.e., the person’s need to have their dignity acknowledged; their predisposition to be considered superior to other people—and their tendency to have a good time—i.e., to have a satisfactory level of life. These goals along with the basic conditions and basic values (needs) give form to the cultural perspectives of human financial and nonfinancial incentives.