Students and Incentives

Student performance in low-performing schools was tested against promises of financial and non-financial incentives for good grades. The results:

1. Size matters: Students were willing to work much harder at $80/hour, but not at $40/hour
2. Punishment > Reward: Rewards were most powerful if framed as losses, demonstrating our stronger attachment to what we possess
3. Non-financial incentives (e.g. trophies) worked best with youth
4. Immediacy is everything: Promises of future rewards was largely ineffective

Toddler Economics

Steven Levitt's toddler outsmarts his incentive scheme when being potty-trained - a lesson for governments.