The Why Axis: Bribing People and Competition

Here’s a delightful discussion of the main points in the first two chapters. Next Monday Geremia will be taking you for a ride along chapters 3 and 4, so please read along!

Chapter one

They dive right into the juicy stuff. What incentivizes people? Why are incentives so tricky?

Gneezy and List hammer home the point that monetary incentives don’t always work in your favor. Sometimes, like for poor Rebecca and her daycare, putting a money penalty effectively makes the problem worse.

As the authors explained, there’s lots of reasons for this. For starters, she set the penalty at $3 for every 10 minutes parents show up late, which a lot of parents found so low that they totally didn’t mind showing up late.

That illustrates the problem of setting the right monetary cost to incentivize the behavior. I bet if she set the penalty at $100 a minute people would actually pull their children out of the daycare in fear of accidentally hitting the penalty, so again, you have to set a penalty that’s just right.

The second problem with putting a price tag on tardiness was that it “crowded out” social norms. Even mentioning money in a social context changes the relationship into something colder and more self-interested. That’s why, for instance, those donation-gathering volunteers were more productive when the only incentive was a big warm thank you rather than a monetary return.

Perceptions change when money is involved, but it doesn’t always have to be for the worse. For instance, money was just the right incentive to get those students to regularly attend the gym (and continue to go after the money flow stopped).

Sure, it’s a “bribe,” but that’s just an opinionated way of saying “incentive to perform a behavior.”

The take home: setting a bribe to alter behavior the way you want isn’t so simple, you have to understand why people are behaving as they are in the first place and adjust the incentive accordingly. Just slapping down a money incentive can definitely backfire.

Chapter two

Now we head into the hardcore topic of gender discrimination. Why do we see way fewer women than men in the high positions of society? There surely isn’t some innate difference holding women back, right?

List and Gneezy say there is a difference between men and women: women respond differently to competition than men.

They tested this keenness for competition in money scenarios. When groups were told the best puzzle solver would earn the most, this prompted only men to try harder than their gender counterparts in the control group, while women tried equally as hard in both. They tested social scenarios too, what with the running experiment, and found that boys run faster in “competitive” pairs than alone, while girls run the same speed in both cases.

As evident as their studies showed a difference between genders, they weren’t ready to describe this difference as “innate.” Another strong possibility was cultural upbringing, subliminally persuading women to act less competitive than men.

To discover which situation was truly the case, they set out in search of the most polar societies. The Masai represent the most patriarchal society, while the Khasi the most matriarchal. The idea is, if it’s society and not genetics that makes women less competitive, there will be a noticeable difference in female competition between the two societies.

In this chapter they only looked at the Masai, but just from those findings, it appears it’s more genes than society at work. The ratio of women to men taking the competitive option was pretty darn similar to that of western society, even though you’d expect even fewer women or more men to be competitive in a more patriarchal society.

As much as I found the chapter interesting, I think their experiment is a little too uncontrolled to be of much explanatory power. Not to mention they completely changed the experiment from puzzles to throwing tennis balls, which the authors tried hard to defend, but I’m not convinced they’re easily comparable.

All in all, this is a great start to the book. The subject matter are engaging and the insights neat to hear. And they even have a real cliff-hanger! I want to know their conclusions on gender and competition based on the matriarchal Khasi. Better tune in next week!

About Nicky Smit

Nicky Smit is a Senior Economics Major, meaning soon he'll be swallowed by economic reality! Thus, he spends his time shooting movies, singing a cappella and writing about things like this info box

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