Ethics: Incentive

A story someone sent me about incentives was completely fascinating. In an effort to increase the number of people donating blood, blood banks started paying people to donate blood. The actual result of this program was to reduce the number of blood donors, since the people who donated felt that getting paid ruined the moral reward for which they had previously been giving the blood. Similarly, in Israel, a daycare center noticed that parents were chronically tardy, causing more of the workers to have to stay late. As a solution, they began imposing small fines on the parents who were late, and there was an almost immediate doubling of the number of late parents. This was because the fine was less valuable than the freedom to be late and the parents believed that paying a fine made the transaction no longer a moral question, morality clearly having a stronger pull than a fine. Since both of these examples demonstrate a particular kind of perverse incentive, I thought it might be useful to think about rewards and their unintended consequences on some of the rest of the behaviors in our lives.

Links:
When economic incentives backfire (Harvard Business Review)
Why fining people can actually increase an activity (Tech Dirt)
Perverse Incentive (Wikipedia)