When Incentives Backfire
Lecture no. 21 from the course: Behavioral Economics: When Psychology and Economics Collide
Taught by Professor Scott Huettel | 29 min | Categories: The Great Courses Plus Online Economics & Finance Courses
In certain cases, incentives can backfire, actually discouraging behavior that they’re intended to encourage. Review studies demonstrating this effect in both small-scale interpersonal interactions and large-scale social policies. Identify how external incentives can undermine people’s internal motivations, and study four key guidelines for where incentives work.