Changes in incentives cause people to change their behavior in predictable ways. An example of a negative incentive is the prospect of a speeding ticket. The question of whether positive or negative incentives work better has long been a matter of debate in society. This is a way of encouraging specific actions without making them compulsory. Learn vocabulary, terms, and more with flashcards, games, and other study tools. Provide illustrations of negative and positive, monetary and non-monetary incentives and how they shape behavior. Incentives can be either positive or negative, and can thus encourage or discourage a particular action. Negative incentives refer to bad consequences, such as losses and fines, which can discourage the behavior. A good example is the case of outsourcing in the early 2000’s. Research however, shows that negative incentives; incentives that require individuals to perform in order to avoid a loss, are more motivating than positive incentives, which motivate individuals through a gain. Emissions trading programs, for example, could have the unintended consequence of concentrating pollution in economically-disadvantaged areas (pollution hot-spots). Speeding tickets discourage drivers from breaking the speed limit. Examples of disincentives are user fees or pollution taxes. For example: A fall in incomes will lead to a rise in demand for own-label supermarket foods Start studying Positive and Negative Incentives. Negative incentives refer to bad consequences, such as losses and fines, which can discourage the behavior. What are positive statements? - Extra credits can be used to incentivize students to participate more in class - A tax cut in the agricultural sector is a good incentive for people to invest more in the sector •Negative incentives also … Negative economic incentives, or disincentives, punish people financially for taking certain actions. An example of a negative incentive is the prospect of a speeding ticket. The main disadvantage associated with economic incentives is that they can be inappropriate for dealing with environmental issues that pose equity concerns. Positive and negative incentives •Positive incentives encourage action. From biblical times to the very recent past, children were thought to be better motivated through negative incentives — known in the bible as the “rod” and two generations ago as “a good spanking” — than positive incentives. a. 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