The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life Read Online Free PDF Page A

clear price—a low one, but a price nonetheless—on lateness. Accordingly, being late no longer involved breaking any tacit agreement. The teachers’ overtime simply became a commodity, like a parking space or a Snickers bar. The market-based incentive completed the contract: now everyone knew exactly how bad it was to be late. If you were Rebecca, you would quickly realize that imposing a fine was a lot less effective than a simple guilt trip.
    Changing meaning in this way turns out to be a big deal. Let’s say that you are the parent of a teenager. You talk with your child about drugs in the hope of convincing her that taking them is bad. If you’re lucky, she listens to you. But if you have suspicions, you might demand that she take a drug test. How does this sort of demand change your relationship with your teen? You are no longer just a parent; you are also a cop. And your teen might now focus on finding ways to cheat the drug test instead of questioning the use of drugs in general.
    Negative incentives in the form of day-care fines and drug tests change meaning, but of course rewards change meaning too. We all assume that offering people money will get them to do what we want. But let’s say you go into a bar after work. You meet someone attractive, and you sense the feeling is mutual. You buy each other drinks and have an interesting conversation. After a while, you say, “Hey, I really like you! Want to come back to my place?” Who knows? You might get lucky. But what will happen if you add, “I’m even willing to pay you $100”? You’ve completely changed the meaning of the interaction and insulted the other person by effectively turning him or her into a prostitute. By adding a monetary value to your interaction, you’ve essentially destroyed what might have blossomed into a nice relationship.
    The Devil’s in the Details
    The rub of the episode with Rebecca is that if you are going to use incentives, you have to make sure that they really work. In fact, if you use incentives that involve money, you’d better be pretty careful about the details, because incentives can easily change our perception of the relationship.
    Consider the following two scenarios involving a policy aimed at encouraging people to recycle soda cans.
    Scenario 1: Let’s say you live in a place where people aren’t paid to recycle soda cans. On a freezing morning you see a neighbor carrying a large bag, full of cans, on her way to the recycling center.
    Scenario 2: Your town has changed its policy. Now people can receive a five-cent reward for each recycled soda can. You see your neighbor carrying a large bag of soda cans to the recycling center.
    What do you think of your neighbor in Scenario 1? In Scenario 2?
    In the first scenario, you probably think that your neighbor is an environmental steward—a citizen of high character, doing her part for the environment.
    But once the small, five-cent-per-can reward is in place, you might think that she is either cheap or really down on her luck. “Why,” you might ask yourself, “is she going through so much effort for such a small compensation? Is she a miser?”
    In fact, the five-cent incentive might have changed the meaning of what your neighbor thinks she is doing. Before the policy changed, her can-collecting was all about protecting the environment. But after the change, she might be aware that she looks cheap or desperate. “What’s next,” she might say to herself, “Dumpster diving? In that case, my can-collecting ain’t worth it.” Giventhis shift in her self-perception, she might eventually stop recycling.
    Another example of how using money as an incentive can backfire took place during Israel’s widely publicized “donation days.” 3 Every year, high school students go door-to-door to collect donations for a charitable organization supporting, say, cancer research or aid to disabled children. On average, the more houses the students visit, the more money they