Show me the money

February 6, 2016 10:52 AM

I am looking for articles (Wikipedia is OK) about both terrible/failed attempts to pay people for x result or wildly successful ones.

I have no idea how you would Google for something like this, thus this Ask. I have seen articles about stuff like this, though I do not have links handy. Some examples:

• The Brits paid ships to take prisoners to Australia. Initially, a high percentage of prisoners died en route. This changed when they began only paying for prisoners who showed up alive.
• Someone (archaeologist?) paid local tribes people 10 cents per bone fragment found. They learned later to their horror that the natives were maximizing their profits by smashing larger bones into tiny pieces.
• A needle exchange program was founded to try to stop the spread of disease (probably AIDS). They paid you $1 and gave you a clean needle for every dirty one you brought in. Some folks would bring in like 300 needles. They eventually learned these were addicts who were collecting needles from others and profiting from the program. They were initially incensed, but ultimately decided to not put a stop to it because it got clean needles to many more people than they could reach directly.

I would love links to sources for the above incidents and anything else you can think of that is in that vein. I am looking for real world examples of what does work and what does not work when you try to pay people to get a particular result.

Thanks!

posted by Michele in California to Work & Money (10 answers total)

Best answer: The term you are looking for (with the negative results) is "perverse incentive". Paying bounties for some pest animal led to people farming it, the issue of Chinese drivers being punished less for killing someone than injuring them,

One example I remember, which is slightly different, is a daycare that started charging parents for late pickups; the number of them actually increased because now parents didn't feel guilty, they felt they were paying a fee for a service.
posted by jeather at 11:10 AM on February 6, 2016 [6 favorites]

Best answer: This will help.
posted by General Malaise at 11:11 AM on February 6, 2016 [1 favorite]

Best answer: I wouldn't call it terrible, but Sergei Bubka broke his own world record in the pole vault 35 times by the smallest possible margins because he got a bonus from his sponsor for each time he broke the record. (Some suggest that Usain Bolt pulled up at the Olympics for the same reason.)
posted by Etrigan at 2:39 PM on February 6, 2016

Response by poster: Since people seem to be missing this, let me reiterate that I am not just looking for negative incidents. I am also interested in examples of things that worked and also also I am interested in analyses of "A failed, so we did B and that worked far better."

I have seen articles on this in recent-ish memory. I could probably dig some of them up with some effort. I was not remembering the term "Cobra effect", though I have seen that before. Thanks for the excellent replies so far.
posted by Michele in California at 2:46 PM on February 6, 2016 [1 favorite]

Best answer: Humane Society International pays Korean dog farmers to shut down their operations, and convert to farming produce.
posted by invisible ink at 3:35 PM on February 6, 2016

An example you might want to consider is the discussions around a universal basic income. People who are anti the idea often frame it as "paying people not to work", but there's reason to think it might not have the effect they are worried about.
posted by lollusc at 4:17 PM on February 6, 2016

Best answer: The Southern Nevada Water Authority pays $2 a square foot for converting grass lawns to desert landscaping. According to this (six year old) article, it's been quite successful. The most recent numbers I can find is 175 million square feet of lawn converted. (At the bottom of the first link.)

Freakanomics blog covers things like this quite often. Try looking through their incentives tag. (Their first book also mentioned jeather's daycare story. Direct link to research paper.)
posted by Ookseer at 5:29 PM on February 6, 2016 [1 favorite]

San Diego's Project 25 might be a good example: for the chronic homeless / mentally ill / drug abusers / medically ill, give them housing first (without requiring them to be clean or sane). It is saving a ton of money: http://www.csh.org/2015/06/project-25-report-housing-homeless-reduces-costs/

The "terrible idea" that came before: many housing programs have a zero-tolerance policy about drug use, ergo the sickest often would be evicted.
posted by soylent00FF00 at 5:47 PM on February 6, 2016

What immediately comes to mind are gun buyback programs, some successful, some not.
posted by Brittanie at 6:43 AM on February 8, 2016

Giving pregnant women vouchers to stop smoking? Financial incentives for smoking cessation in pregnancy: randomised controlled trial.
posted by paduasoy at 5:53 PM on February 14, 2016