Abstract: This paper discussed the relationship between intrinsic motivation and extrinsic incentive,confirmed their status in incentive mechanism design.By modeling analysis,we found that intrinsic motivation can exert significant incentive effect to the agent’s behavior, which can improve the agent’s effort.Especially,when the individual’s intrinsic motivation boosts,it can be the substitution of extrinsic incentive,intrinsic motivation is the source of effort and should be the core of incentive mechanism,and extrinsic incentive is the complement to intrinsic motivation.

Key words: intrinsic motivation, extrinsic motivation, incentives, principal-agent