Paying Your Kids To Take Out The Trash

Ok, so people are complicated creatures. Sometimes they do what you expect them to do and sometimes they don't. And then every once in a while they totally surprise you... by doing the exact opposite of what you expected them to do. Need an example? In 2000 a couple of economists studied a child care center in Haifa, Israel for several months. It opened at 7:30 a.m. and closed at 4 p.m. every day and parents were asked to pick up their children by this closing time, or a teacher would have to stay late. During the first month, the economists observed how many parents arrived late to get their kids. Then, with the permission of the day care center, they put up a sign announcing a fine of 10 Israeli shekel (about 3 U.S. dollars at the time) for each child that was picked up after 4:10 p.m.

It was obvious what the researchers (and no doubt the teachers) wanted to achieve: eliminate unwanted behavior by punishing it. But instead, the number of parents who arrived late started to increase and ultimately almost double! What had happened? Daniel Pink, who tells the story in his bestselling book Drive. The Surprising Truth About What Motivates Us, tries to explain:

The fine shifted the parents' decision from a partly moral obligation (be fair to my kids' teachers) to a pure transaction (I can buy extra time). There wasn't room for both. The punishment didn't promote good behavior; it crowded it out. (p. 53)

So instead of giving the parents an incentive to be more considerate of their kids' teachers, it gave them permission to arrive late, since they were now paying for it. That's the complicated nature of the carrots and sticks principle. When does it work and when doesn't it? How do you apply it correctly? Would the punishment have worked better if the fine for the parents had been higher? Who knows...

If you've been reading my most recent posts, you know that it's just as complicated with the carrot part of the idea. A closer look at the principal-agent problem tells us why. The principal (the teacher, the employer, the parent) tries to get the agent (the student, the employee, the child) to do what he wants and is in his or her own interest. Naturally, the agent would also like to get something out of the interaction. But what happens when the principal offers a reward (in the interest of the agent) for the task?

By offering a reward, a principal signals to the agent that the task is undesirable. (If the task were desirable, the agent wouldn't need a prod.) [...] Pay your son to take out the trash -- and you've pretty much guaranteed the kid will never do it again for free. (p. 54)

On the one hand you will get the behavior you were looking for, but only at the price of constantly having to reward it. And as your son gets older, he may also want more money than you initially offered him (he's asking for a raise, since he's been doing a good job of taking out the trash and meeting his needs is now more expensive than when he was five). So something that works well in certain situations and for certain tasks (like very mechanical and monotonous tasks at the workplace) can be the worst thing you could do in other situations and for other tasks (asking your child to help out in the household). Anton Suvorov, the Russian economist who demonstrates this effect, believes that rewards can actually be addictive.

As Suvorov explains, "Rewards are addictive in that once offered, a contingent reward makes an agent expect it whenever a similar task is faced, which in turn compels the principal to use rewards over and over again." And before long, the existing reward may no longer suffice. It will quickly feel less like a bonus and more like the status quo -- which then forces the principal to offer larger rewards to achieve the same effect. (p. 54)

Punishments for bad behavior that backfire, rewards for good behavior that become addictive... can it possibly get any worse? Well, yes. As I wrote in an earlier post, extrinsic rewards tend to narrow our focus, making it more difficult to think and work creatively.

But extrinsic motivators -- especially tangible, 'if-then' ones -- can also reduce the depth of our thinking. They can focus our sights on only what's immediately before us rather than what's off in the distance. (p. 56)

That can be useful in some instances. In others, it's devastating. Global financial crisis of 2007-08, anyone? It might look like some people just got a little over-excited, but in essence it was a "bad case of extrinsically motivated myopia", as Mr. Pink calls it. When you've created an environment in which extrinsic rewards rule the show, most people will only work until the reward is triggered. If students get a prize for reading three books, many won't be willing to pick up a fourth. So we need to be careful with giving out prizes and certificates. "Greatness and nearsightedness are incompatible. Meaningful achievement depends on lifting one's sights and pushing toward the horizon." (p. 58) How can we motivate ourselves to do so? Stay tuned...