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Loss aversion incentives will be more effective

Loss aversion incentives will be more effective than gain incentives
In Chicago's minority neighborhoods, students generally perform poorly academically. In order to motivate teachers to improve teaching effectiveness, some people have conducted different types HE Tuber of motivation experiments:
Positive (gain) incentives: Teachers can receive up to $8,000 at the end of the year if your students' performance improves during the school year.
Reverse (loss aversion) incentives: Give teachers an $8,000 reward at the beginning of the year. At the end of the year, if your students' performance improves during the school year, you can keep it. If not, you need to give it back.
Take a guess, will people work harder to avoid returning the money they deposited into their accounts at the beginning of the year, or would they prefer to be rewarded at the end of the year?

The final results showed that compared with students from teachers who did not receive any rewards, the performance of students who received gain incentives did not improve, but the performance of students who received loss-aversion incentives improved by ten percent.
This is a good example of how using earnings incentives can lead you to conclude that incentives don't work; after all, student performance isn't improving as a result of being motivated by a earnings framework. The correct conclusion, however, is that you need to understand the psychology behind incentives to make them work.

The same principle has also been verified in other cases: 

when the company's 5,000 employees are encouraged to choose green travel methods to go to work and not drive, there are also 3 group incentive methods:
Those who do not drive every day will receive a daily reward of $5;
For those who don't drive every day, there will be a drawing on Friday, and the winner will be awarded $500.
There will be a draw for everyone on Friday, regardless of whether they have driven or not, and the winner will be awarded $500. However, if the winner is found not to insist on traveling green during the draw, the winner will be disqualified and the draw will continue.
The final results showed that compared with the control group, the first group reduced the number of drivers by 10%, the second group reduced by 18%, but the third group reduced by 26%, which was the best effect.
This is what “loss aversion” does, a psychological principle proposed by Amos Tversky and Daniel Kahneman: rewards are evaluated relative to a reference point, so the outcome is encoded in our brains as Gain or loss, and the loss is greater than the equivalent gain. That is, people are more affected by trying to prevent losses than by trying to gain.

(3) Low incentives are suitable for social value, and high incentives are suitable for self-interested incentives.

Most of the incentive programs we've discussed so far use direct compensation to motivate people's efforts. However, sometimes our actions are driven by other reasons, such as helping others (generating social value).
For example, if a company wants to motivate employees to quit smoking, there are two incentive programs:
An employee who smokes will receive a $5 reward for each week he or she quits smoking.
Every week an employee who smokes quits can donate $5 to a local charity.
Which incentive design do you think is more effective in motivating employees to quit smoking? Note that the incentive value in both cases is low.
The results showed that compared with the control group, the number of quitters in the cash reward group only increased by 1%, but the number of quitters in the charity reward group increased by 10%.
Why are social value incentives better? Jim Andreoni of the University of California, San Diego, calls it the “warm glow” effect: the joy and satisfaction that comes from doing what you can to help others.
Just like donating blood or being a firefighter, it's always a matter of volunteering, not a high-paying reward. This sense of pride in volunteering is a commodity a community cannot put a price on, a personal reward that belongs to those who care deeply.
So, does that mean social value incentives are always better than cash incentives? Under what circumstances should we use them respectively? The researchers designed an ingenious experiment to test this problem: recruiting college students into groups to test manual force counting values, and giving different levels of cash incentives and charitable donation incentives.

In the first group, those with higher dynamometer values ​​will receive $5;

In the second group, those with higher dynamometer scores received $5 but donated it to charity;
In the third group, those with higher dynamometer values ​​will receive $100;
In the fourth group, those with higher ergometer scores received $100, but donated it to charity.
Results showed that when the incentive was low ($5), students exerted more effort when working for charity than when working for themselves. However, when the incentive was high ($100), students under the social value incentive no longer worked harder than students under the cash incentive.
This finding tells us that social value incentive designs work better when rewards are smaller , because we are generally insensitive to the size of charitable donations and more concerned about the fact that we contributed. On the other hand, self-serving incentive designs work better when the rewards are large , because while small monetary rewards crowd out our motivation, we are very sensitive to large amounts of money.

(4) Elements of honor incentives: audience, scarcity, awarding organization, selection process

Honor incentives, also known as awards and medals. How to use honor to motivate people to make a difference? How can signals be used to enhance honor incentives and shape the stories the incentives convey?
Honor incentives are multifaceted, and different aspects of it can alter the self- and social signals sent. Therefore, its success also depends on these design details.
The first key to honor incentives is audience: Part of the value of the Oscars is having a lot of people watching. The social signal value of winning a prize privately, when only a few people know about it, is less valuable. However, sometimes the audience does not have to be present at the award ceremony for the award to have social signaling value; it is enough for them to see the plaque or statuette on their office shelf.
Another important aspect of honor incentives is its scarcity: the scarcer the award, the greater its social and self-signaling value, which would otherwise serve as a distraction. The Nobel Prize attracts attention partly because of the rarity of the event. If the award were given out weekly instead of annually, its prestige and reputation would be damaged.
The third key to honor motivation is the award-winning organization: Marlon Brando, the legendary actor and film director, won the 45th Academy Award for Best Actor through the "Godfather" series of movies. But at the award ceremony, he refused to accept it and arranged for an Indian to speak on stage. The reason is that as a member of the Indigenous Equal Rights Image Committee, he condemned the Academy Awards organization's frequent discrimination against indigenous peoples. Brando's boycott shows what happens when the values ​​of the award giver are at odds with those of the recipient.
The fourth key to honor incentives is the fairness of the selection process: it is easy to understand that if the selection process of an honorary award is full of insider trading, then the importance of the award will continue to decline until it is forgotten.

3. Develop good habits: 4 scientific methods of long-term motivation

Don’t stay up late, have savings, keep working out, and be single successfully... At the beginning of the new year, setting a flag seems to be one of the biggest rituals for adults.
At the beginning of 2021, the "2021 Intermittent Complacency Report" released by Taobao Education showed that consumers set millions of Flags in the first week of the new year. For example: "This year, I want to get in good shape and lose at least 10 pounds." However, a few weeks later, I canceled my gym membership on the grounds that I was too busy at work and had no time.
Gym data validates this phenomenon: more gym memberships were purchased in January than any other month, accounting for about 11% of total annual membership purchases. However, approximately 50% of new fitness enthusiasts will abandon their membership by the end of January, and only 22% of them will stick with it until October.
This may be the norm for many people. It’s easy to declare a goal, and it’s easy to set ambitious long-term goals. The hard part is following through and delivering on your commitments.
So, what exactly is the problem? How should we solve it?
In fact, introducing external incentives can help us change our behavior and develop good habits. Can we understand the psychology behind people's inability to consistently change their behavior? What methods can you use to help yourself develop good habits? Or, when we want to make a change, how to make the change with minimal cost.
These methods can also be used to design incentive systems to allow target users to achieve long-term and effective incentive goals.

Loss aversion incentives will be more effective
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Loss aversion incentives will be more effective

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