Lecture 4

• Incentive: A valuable outcome that can be attained by meeting a particular performance criterion
• Reinforcer: A stimulus presented right after a behavior, which increases/decreases the probability that the behavior will occur again in the future
• Types of reinforcers:

  • Positive reinforcement
  • Negative punishment
  • Effectiveness punishment
  • Side-effects of punishers:
  • "Anyone who uses shock becomes a shock" - Sidman (1989)
  • Negative emotions (fear, crying)
  • Negative modelling of how to cope with undesirable behaviour in others
  • Compliance vs personal endorsement
  • Differential reinforcement
• Schedules and effectiveness:

  • Fixed ratio: fixed number of responses
  • Fixed interval: fixed amount of time
  • Variable ratio: variable number of responses
  • Variable interval: variable amount of time
• Reinforcement schemes:

  • Checking email and social media
  • Fun/pleasant messages
  • Posting on social media
  • Likes/Comments
  • Application: Social media
• Types of reinforcers for mom:

  • Dopamine signals:
  • Learning phase
  • Behavior or cue
  • Reward
  • No reward
• Incentives problems:

  • Encouraging vs incentivizing
  • Quality vs Quantity
  • Long-term goals vs Short-term goals
  • Innovation & risk-taking vs Punishing failure
  • Teamwork vs Individual success
• The criterion problem:

  • Finding good operational criteria is difficult
  • People tend to choose criteria that are readily available, easy to measure, and have low costs
  • Often these criteria don't represent the ultimate goal and stimulate people to look for shortcuts
  • Physician incentive plans
• Perverse incentives:

  • Unintended and undesirable results contrary to the purpose
  • Criterion problem: Performance in multi-dimensional dimensions are hard to define, not all dimensions can easily be measured
• Undermining effect of rewards on motivation for expected rewards:

  • Tangible rewards (money, awards, things) not for praise/positive feedback
• Intrinsic incentives:

  • Self-image
  • Reputation
  • Prosocial
  • Small incentives (not big incentives) can crowd out initial motivation for behavior
  • Effects can last after removal of the incentive
• Signaling function of added rewards:

  • About the task: attractiveness/importance, person needs additional rewards
  • About the self: Reputation, Self-image
• Prospect theory:

  • Loss
  • Gain
  • Reference point: budget, what you paid for something before, what something else costs, what someone else has, something you saw recently, etc.
• Dealing with money:

  • A dual process model: Fast (System 1) uses only one point of reference, Thorough (System 2) uses multiple reference points, retrieving reference points, more computational costs, a more absolute evaluation of an amount of money
• Processing money:

  • Experiment by Kassam et al (2011): Winners love winning and losers love money
• Wrapping up: the special case of money:

  • Money has no 1-on-1 relationship with the hedonic continuum
  • Hedonic impact depends on how money is spent
  • Money has nearly infinite range
  • Diminishing marginal utility
  • Prospect theory: Evaluation of money is always relative, comparison standards play a key role
  • Using more standards requires knowledge and effort
  • Spending effort only happens when the decision is important and people have capacity available