Incentivize, Incentivize

Incentivize, Incentivize

I recently participated in a World Economic Forum panel on decision making. The panel consisted of economists, psychologists, political scientists, physicians, and policy experts. The panel’s charge was to discuss ways to get people to behave in their own interest and in society’s interest. The buzzword was “incentivize,” and it was clear that most members of the group could think of incentives only in terms of promise of monetary gain or threat of monetary loss. Give people subsidies for wise behavior and threaten them with fines for unwise behavior.

Of course there’s no question that monetary incentives can be highly effective—indeed, sometimes they can be astonishingly effective. So much so that the members of the panel were quite prepared to believe the claim that some cities have had marked success in getting teenage girls to avoid pregnancy by paying them as little as a dollar a day. The program sounds like a great deal because the amount is trivial for the city but allegedly is sufficient to greatly reduce pregnancies—and consequent costs to the city, not to mention costs to the girls. But in fact, whether the program has any effect is controversial, and any success it might have could be due to other aspects of the program, such as sex education and opening up life possibilities by bringing the girls to a college campus on a regular basis. Our faith in monetary incentives leaves us too willing to believe the “dollar a day” claim.

Behavior is governed by a host of factors other than monetary ones, and some nonmonetary incentives are highly effective when monetary incentives are useless or worse. Social influence can do much more to move people in the desired direction than promises of reward or threats of punishment or any amount of admonition.

Mere information about the behavior of others can motivate people to change their own behavior. If I know that other people are behaving better than I am inclined to do, that serves as an agent of social influence. I want to do what others do.

Knowledge that others are behaving better than one would be inclined to think they are is often much more effective than preaching—which can backfire by suggesting that bad practices are more widespread than they actually are. That gets the conformity ball rolling against you.

Want to get people to use less electricity? If they’re using more electricity than their neighbors, leave a hang tag on their door telling them so. For good measure, add a frowny-face emoticon. And give them suggestions about how they can save energy. If they’re using less energy than their neighbors, leave a hang tag on their door telling them that, too—but be extra sure to add a smiley emoticon, or the information may result in their actually increasing energy usage. At the time of this account, the intervention was reported to have saved more than $300 million in energy costs for the state of California and prevented billions of pounds of CO2 from escaping into the atmosphere.

Want students at your local college to engage in less binge drinking? One approach, discussed in Chapter 2 of the book, is to tell students how much other students on their campus are drinking, which is likely to be less than students tend to think. Want to increase compliance with state tax laws? Tell people about the rate of compliance in your state. Most people greatly overestimate the amount of tax cheating that goes on in their state. When they do overestimate, they can justify their little fibs: “I’m not one of those crooks, I’m just putting some body English on my travel expenses.” Information about rates of cheating makes it harder to engage in that kind of rationalization.

Want to get people to conserve water and protect the environment by reusing towels in hotel rooms? You could just ask them to do that, but it’s not as effective as telling them that most guests at the hotel do reuse towels, which in turn is less effective than telling them that a majority of people who had “stayed in this room” in the past have reused towels.

You can tell people that insulating their attic will save them several hundred dollars per year, and you can further promise them a monetary reward for insulating. But you’re not likely to get much compliance. If you’re like me, there’s a big barrier: the attic is so full of junk that it’s hard to reach the ceiling to put in the insulation. Try offering a subsidy to help people move their junk around or to just get rid of it, and see whether that doesn’t increase attic insulation.

Monetary incentives and attempts at coercion are particularly likely to be counterproductive if the person perceives the incentive or coercion threat as indicating that the activity is not a very attractive one. Why else offer an incentive to perform the activity or issue a threat if they don’t perform it?

Many years ago Mark Lepper, David Greene, and I put an intriguing new activity out on the table of a nursery school. Children could draw with a type of felt-tip markers they hadn’t encountered before. We observed the children and recorded the amount of time each spent drawing with the markers. Two weeks later, an experimenter approached some of the children and asked them whether they would like to draw some pictures for him using the markers in order to have a chance to win a Good Player Award: “See? It’s got a big gold star and a bright blue ribbon, and there’s a place here for your name and your school. Would you like to win one of these Good Player Awards?” Other children were simply asked whether they would like to draw with the markers. All children who “contracted” to draw with the markers were given the Good Player Award. Some children did not “contract” for drawing with the markers, but the experimenter gave them one anyway. And some did not contract for the award and did not get one. One to two weeks later, the marker activity was again placed on the table.

Children who got the award after having contracted to draw with the markers in order to win it drew with the markers less than half as much as children who got an unanticipated award or no reward at all. The young contractors realized that drawing with the markers was something they did in order to get something they wanted. The other children could only infer that they were drawing with the markers because they wanted to.

As Mark Twain said, “Work consists of whatever a body is obliged to do, and … Play consists of whatever a body is not obliged to do.”

Before offering a reward, consider what is preventing the behavior, what people believe others are doing, and whether a promised reward might undermine an existing interest.