Explores preference formation and evolution, discussing the interaction between intrinsic motivation and extrinsic incentives in both static situations and in more dynamic contexts. Summarizes the orthodox economist’s model of individual choice. Considers how intrinsic motivation may fit into orthodox economics. Investigates how the idea that one person internalizes the welfare of a specific other person may be modeled formally. Reviews three books by economists that break with the traditional view of preference. Looks at choice and preference in a dynamic-choice context. Assesses some social psychological theories of how context and experience can affect tastes. Evaluates how extrinsic incentives may drive out intrinsic motivation. Provides a series of simple formal models that show the power of intrinsic motivation in relation to extrinsic incentives. Contends that identity economics forces become more powerful and important in dynamic contexts. Kreps is Adams Distinguished Professor of Management and Economics Emeritus at Stanford Graduate School of Business.