The role of monetary incentives in feedback processing: why we should pay our participants

Performance monitoring has been associated with two event-related potentials. The feedback-related negativity reflects a reinforcement-learning signal leading to remedial action, whereas the P3 reflects the motivational significance of feedback outcomes. Till date, research has focused on how these components are influenced by different outcomes within a range of the same, usually monetary, feedback type. This study examined how different feedback types (monetary vs. nonmonetary) influence these two components. Participants performed a time-estimation task under a monetary and a nonmonetary condition. Larger feedback-related negativities, better overall performance, and smaller behavioral adjustments were found under the monetary condition. Larger P3 amplitudes were present under the monetary condition and in response to positive outcomes. Condition order influenced only the P3. Addition of financial incentives increased the P3 amplitude, whereas removal of financial incentives did not alter the P3 amplitude. The results suggest that individuals were more reluctant to commit errors under the monetary condition as evidenced by more pronounced reinforcement-learning signals and better overall performance. Positive outcomes under this condition were most salient as indicated by larger P3s.