Incentives

What is an Incentive When parents or teachers want you to behave in a certain way, they sometimes offer incentives to encourage you or influence you to make a choice. Offering incentives is one way to get people to do what you want. – When a teacher offers a good grade to students who finish their work on time, this is an incentive. – When a parent offers ice cream to their children to finish their vegetables, this is an incentive.

What is an Incentive Incentives often work to influence people's behavior. However, not all incentives work for all people. Which incentives influence you? Which do not?

Incentives at Home Getting an allowance for doing chores. Grounded for fighting with parents or sibling. Extra money for raking leaves. Lose driving time if you’re not home on time. What are two more incentives at home?

Penalties Negative incentives punish people and leave them worse off if they do not choose the correct behavior. – These are called penalties. What are some penalties you can think of?

Incentives at School Full credit for turning in homework on time. Suspension for fighting. Good grades for studying. If you lose a library book, you can't check out new ones. Field trips for classes that behave well. Can you think of two more incentives at school?

Economic Incentives Economic Incentives use money to: – encourage you – persuade you – convince you – bribe you – punish you – reward you – penalize you – influence you

Economic Incentives Businesses often use economic incentives to encourage people to come and do business with them. Offering incentives is one way to get customers to choose to come and spend money at a business.

Economic Incentives Restaurants use coupons, buy-one, get-one deals, Kid's Eat Free Night, and other incentives to encourage people to choose their restaurant. Stores offer coupons, sales, discounts, buy- one, get-one free and other incentives to get customers to choose their store. Airlines give frequent flier miles as incentives for people to choose to fly with them.

Economic Incentives Government agencies also use economic incentives, but they usually do it to encourage certain behaviors in people. Offering incentives is one way the government tries to get people to behave responsibly.

Economic Incentives Public libraries use library fines to discourage people from keeping the books too long. Fines encourage people to choose to turn books in on time. Park rangers & park police officers use littering fines as a way to keep people from littering. Fines help people choose not to litter, and this keeps the parks clean. Police officers use speeding tickets and parking tickets as incentives to keep people safe. Speeding tickets discourage people from choosing to speed and encourage them to drive safely.

Economic Incentives Parking tickets help keep parking spaces open for the handicapped and fire hydrants clear of unwanted cars. Parking tickets encourage people to choose only legal parking spaces. Police officers give out tickets if babies are not riding in car seats or if people are not wearing their seatbelts. These negative incentives discourage people from choosing unsafe behaviors.

Economic Incentives You will only get the economic incentive if you make the required choice or behave in the way that you are asked. – You might be influenced by the incentive, but you still must make a choice.

Was there ever a reward that you wanted so much, you had to earn it? Was there ever a reward that just did not interest you, so you decided against earning it? Was there ever a penalty so awful that you had to behave so you would not get it? Was there ever a penalty that just did not bother you, so you did not care if you earned it?

Why do people use incentives? Do all incentives work? Why? Does everyone think and react in the same way about an incentive? Why? Do you think economic incentives work better than non-economic ones? Why? Why not?