How to boost the production of free services: in search of the holy referee grail

This paper argues that delivering free services is driven by a combination of motivations and explains how policy makers or other principals can exploit them to deal with underproduction of free services. We identify intrinsic motivation, respect and gratitude as main examples of underlying motivations. What is essential for free services is that there is considerable heterogeneity in how these motivations are valued across the population. We show how a menu of (monetary and non-monetary) rewards can easily outperform simple compensation approaches since it allows for self-selection and caters for the heterogeneity. As the leading example, we illustrate how a menu can improve the academic referee process. The menu idea can be used in a large set of settings and is potentially very fruitful.