What Do Schoolteachers and Sumo Wrestlers Have in Common?

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Consumers are motivated to spend more when there are incentives present in the form of discounts and special promotions. Their satisfaction in spending less to buy a desired item indicates how incentives work by influencing an individual’s decision making ability. The fact that the item was on a discount enabled the individual to buy it as the reduction in the price of the item was a strong economic incentive. The concept of incentive is present in an everyday life situation as it basically impacts the actions of every individual. Incentives are efficient tools used to manipulate the human behaviour in order to achieve desired outcomes. However, it is deniable that incentives deliver the expected results all the time. Incentives do not always achieve its’ goals. This essay argues about the flaws in incentives due to the nature of incentives itself, discusses the effect of incentives that encourage cheating and the result of an ineffective incentive given the circumstances. Before scrutinizing the effectiveness of an incentive, it is fundamental to understand the nature of incentives itself. According to the Freakonomics, incentives are essentially divided into three aspects; social, moral and economic. Social incentives tend to determine how individuals respond to societal pressure. It is the needs of an individual to obtain acceptance among peers, gain reputation or conform by norms of the society that causes the individual to react in a particular manner. Meanwhile, moral incentives are much more subjective and individualized. Moral incentives use the rational and emotional sides of individuals to encourage or discourage them from making certain choices. It reflects the principles of being humane. It appeals to the conscience of...

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...ny incentive is only as effective as the amount of happiness it generates. In conclusion, incentives are dependent on factors such as morality, economics and social norm. Weak incentive brings about negative effects and usually do not achieve its motives. It is not also justified to cheat because there is an incentive to do so. Incentive is a tool that requires constant tinkering and changes to ensure that it functions properly. Then again, the effects of incentives toward the individual and society are very unpredictable. Incentives would remain imperfect as long as human being strives to beat it.

Works Cited

Levitt, Steven D., and Dubner, Stephen J. Freakonomics:A Rouge Economist Explores The Hidden Side of Everything. New York: Harper, 2009. Print.

Bowles, Samuel.“When Economic Incentives Backfire.”Harvard Business Review, March. 2009. Web. 7 August. 2011.

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