![](https://english.phbs.pku.edu.cn/uploadfile/2017/1117/20171117035702988.jpg)
This paper examines the role of intrinsic incentives and corporate identity in motivating innovation. We show that when innovation is ambiguous, the use of extrinsic, high-powered incentives can deter innovation when it is not complemented with strong intrinsic incentives - the degree of self-motivation, and the extent to which the agent identifies with firm's goals and mission. The paper predicts that extrinsic and intrinsic incentives are not simple substitutes, but play a complementary role in motivating innovation, which explains why many innovative companies that provide generous extrinsic incentives also invest heavily in fostering corporate culture.