[MUSIC] In addition to legal intervention, described in the last video of the current lecture, economic incentives can trigger norm change by altering the cost and benefits of the target behavior. The idea is that providing a payment for the adoption of a desirable behavior should steer individuals towards it. Yet, several studies have shown that monitoring incentives can backfire. For example, in a famous study in the 70s Titmos showed that paying people to donate blood could result in a reduction of the proportion of donors. Possibly because doing so broke a normal voluntary contribution. This crowding out of intrinsic motivation is linked to a variety of signals that monetary incentive may provide. The activity may be reframed as a monetary transaction thus obscuring it's moral significance. If the price is too low, it may signal that the activity is of low importance, discouraging engagement in it. Finally, a monetary incentive may implicitly suggest that an inducement is needed to keep people from skirting the activity. For example, incentivizing people to pay taxes or generally contribute to the public good would signal that incentives are needed because people in general do not easily contribute. Introducing fines to discourage some behavior May also produce a clouding out affect. Nissi and Rostukini did a field experiment within eleven real daycare centers in Israel. Since parents at time came late to pick up their children some of the daycare centers used a fine for the late comers. Surprisingly, these are resulted in an increase in the number of late pick ups. Presumably, parents now perceived the monetary cost of lateness as a justification for their behavior if they pay the required fine, they do not feel as bad to showing that late. When one can pay a small fine for bad behavior it signals that the behavior was not all that bad in the first place. Otherwise, why is the fine so low? The small fine may have lead people to undervalue the significance of being late and also provide a remedy for being late. Now, one pays for it. Here are the results in terms of late arrivals of introducing a fee and later on removing it. As you can see from the figure, when the fine was introduced, there was a slight decline in late pick ups, but at week five we see a steep increase in the number of parents who arrive late. At week 17 when the fine was removed, parents were more likely to pick up their children late then they were before the intervention. Introducing a fine, transform what was originally a norm of courtesy, one should not be late and make daycare workers stay longer, into a market transaction. And after the fine was removed, the behavior was not restored to its original normative status. This study and many other show the dark side of the crowding out effect of monetary incentives. When the incentive is removed, the motivation to perform a task without the additional monetary incentive can be permanently reduced. The crowding out effect is an example of the involuntary framing of the situation through the activation of a particular script. Monetary incentive may induce the activation of the market script with a result that the activity that was previously disapproved now becomes admissible. So longer as a price is paid. Another effect of pricing an activity like providing incentives for pro-social behavior is that activity gets anchored that was specific monitoring value that might be much lesser than what one would have originally value to that engaging in pro-social behavior, such as volunteering, may gratify people. Yet, paying them a small fee to volunteer may downgrade the activity by signaling that it has little value. In addition to changing normative behaviors into market transaction a further negative effect of monetary incentive is that they signal both to one's peers and to one's self that one is doing it for the money, rather than for moral reasons. For example, it has been shown that simply offering gets more monetary incentive to donate significantly to increase the blood donation rates. But when people were offered the opportunity to donate the money to charity, blood donation rates returned to their original level donating the money reaffirms the original signal that one is morally motivated. Monetary incentives have been used to build latrines, send girls to school, curb child marriage, encourage the use of condoms, and get children vaccinated. The results of such incentives are mixed. Incentives in education have often been successful. Paying families to keep girls in school longer increases the opportunity cost of marrying them off earlier and makes a girl more valuable to the family. Who begins to treat her as a long term investment. Not only are girls kept in school longer, but they are better nourished as well. In this case, the incentive is very specific, keeping the girl in school for a set number of years. The target behavior is limited in time, as school eventually ends. And it is easy to monitor successful outcomes. Incentives to build a newest latrines, however, have not met with much success. Latrines are initially built but sooner put to other uses. We have seen that, a storage, kitchen, or animal shelter. The monetary incentive in this case was meant to use a bundle of different activities. Since abandoning open defecation involves not just building latrines but also keeping them factional and using them consistently monitoring or such activities is a difficult task. Moreover the target behavior is not limited in time but has to continue indefinitely. The Water Bank Water and Sanitation Program in India has provided significant amount of money for constructing latrines. Yet, even with substantial subsidies to induce people to use them, half of the toilets went unused. One reason the program did not work was that the target community was not involved in the process of understanding the damage caused by open defecation. Which could have resulted in a collective decision to abandon the practice. What is needed to abandon of identification is a different sort of incentive. People will have to be convinced that a sustained and continuous effort is worthwhile. The nomenclature model I have described in lecture ten, suggests that when dealing with ongoing long term practices that involve many connected behaviors and considerable monitoring. Sustainable behavioral change requires paradigm shift from economic incentives to creating new norms. This does not imply that the government should not materially help by providing tools and materials, especially for those who could not afford them. On the contrary, carefully consider material and nonmaterial incentives can be compliments in altering human behavior.
