Economic Principle #4: People respond to incentives. Hmmm…if you think about it, the part that gets left out of that statement is HOW people respond to incentives. I wrote before about Dan Pink’s TED talk on behavioral responses to incentives in a number of different contexts. A brief summary: Incentives (specifically monetary incentives) work in the expected fashion when the task at hand is mechanical and mostly a matter of straightforward effort. However, when the tasks involve higher levels of cognition or creativity, the monetary incentives actually stifle performance rather than drive it. In addition, people undertake activities for reasons of mastery, purpose, etc. rather than specifically for monetary reward. (Shocking, right?)
I know y’all like pictures and cartoons (as do I), so I figured you would be pleased with this cartoon-annotated version of Dan Pink’s talk to the Royal Society for the encouragement of Arts, Manufactures and Commerce. (The way that the illustrator does the drawings and then the video is sped up to match the speech is in itself pretty neat.)
Here’s also a longer version of the talk…though it doesn’t have cartoons. Sad.
Here is a related PBS NewsHour interview for for those of you who, like me, just can’t get enough of this stuff.
I think that this particular topic is interesting to me because it’s basically an allegory for my life. 🙂
P.S. It’s not how I came upon the video, but the fact that reader Robert put a link to the video in the comments to a recent post did not go overlooked…so thank you!