Answer:
Moral or social incentives are those that appeal to our sense of right and wrong, or our desire to be liked and respected by others. Economic incentives are those that involve material rewards or penalties, such as money, goods, or services. Sometimes, these incentives can work together to motivate people to behave in a certain way, but other times they can conflict with each other and create dilemmas or trade-offs.
Step-by-step explanation:
Here are some examples of situations where both moral or social and economic incentives are present:
- Donating blood: People who donate blood may do so because they feel a moral duty to help others in need, or because they want to be seen as generous and altruistic by their peers. These are moral or social incentives. However, some people may also donate blood because they receive a monetary compensation, a free gift, or a tax deduction. These are economic incentives. Depending on the person, the different incentives may be complementary or competing. For example, some people may feel more motivated to donate blood if they get both a moral satisfaction and a material reward, while others may feel less motivated if they think that getting paid for their blood diminishes the value of their altruistic act. In this case, the stronger incentive may vary from person to person, depending on their values and preferences.
- Recycling: People who recycle may do so because they care about the environment and want to reduce waste and pollution, or because they want to conform to social norms and expectations. These are moral or social incentives. However, some people may also recycle because they get paid for their recyclable materials, or because they save money on garbage disposal fees. These are economic incentives. Again, the different incentives may be complementary or competing. For example, some people may recycle more if they get both a moral satisfaction and a financial benefit, while others may recycle less if they think that getting paid for their trash makes them less environmentally conscious. In this case, the stronger incentive may also depend on the person’s values and preferences.
- Cheating on a test: People who cheat on a test may do so because they want to get a higher grade, a better reputation, or a more favorable outcome. These are economic incentives. However, some people may also refrain from cheating on a test because they feel a moral obligation to be honest and fair, or because they fear the social consequences of being caught and punished. These are moral or social incentives. In this case, the different incentives are clearly competing. For example, some people may cheat on a test if they think that the economic benefits outweigh the moral costs, while others may not cheat on a test if they think that the moral costs outweigh the economic benefits. In this case, the stronger incentive may depend on the person’s risk aversion and moral sensitivity.
These examples illustrate how moral or social and economic incentives can influence human behavior in different ways. As Levitt and Dubner show in Freakonomics, understanding these incentives can help us explain some of the seemingly irrational or surprising phenomena in our society.