Economic Incentives (answering Quetion) – Assignment Example

Information Script Responses In this scenario, the word incentive was basically a financial gift or benefit for the children to make a decision that the parent wanted them to make. Due to this system, the parents served as the main influencing factor in providing the children with candy or money to behave or act in a manner that was desirable. In this case, the parents wanted the children to go to the bathroom as young infants instead of needing diapers changed. The parents also wanted the children to make purchases that they approved of with their allowance money, or a fee (tax) was charged for purchases that were not approved.
The daughter clearly understood the system and tried to side-step the system to get exactly what she wanted all along. She was able to earn more gifts or money by pumping her little brother full of water to force him to go to the toilet more often. The little girl was intelligent enough to know that if the frequency of bathroom trips increased so would the amount of gifts and money she received for helping her brother learn to be potty trained. This was definitely not within the spirit of the incentives-based system that the parents had originally created; however, it was well within the rules of the system and created additional benefits for the girl at the expense of her little brother’s bladder.
The children had the advantage of knowing the system and playing within the rules to increase the benefits or type of benefits they would receive. The parents created the rules but they were at the mercy of the children who would actually perform the actions. If the children did not perform as the parents had intended through the incentives-based system, the parents did not receive the outcomes they desired. This was effectively described as the father expressed the issue of citizens going to foreign countries to make tax-free purchases or to find alternative methods for performing the actions they found most desirable.