Where economics and psychology meet

Here is the scenario: 5 year old gets herself out of bed at 6:30am. She picks out clothes for the day. Puts them on. Neatly folds her pyjamas and puts them away and makes her bed. She then goes downstairs and makes her breakfast and eats it. All without adult supervision or coaxing.

Sound like a fantasy? Well, that is what happened in our house this morning. And why? Because our 5 year old daughter would earn herself a point if she did all that. This happens most days.

I thought about this when I read today's piece in Slate by Alan Kazdin and Carlo Rotella that looked at the differences between bribing rewarding your child. It talked about the resistance many parents feel to rewarding good behaviour. There were lots of concerns including moral outrage (why should I reward things that they should be doing anyway), the future (if I reward stuff when will it stop), intrinsic motivation (if I reward them explicitly they won't be intrinsically motivated), it will spread (she'll need rewards for everything -- in life!), and they just don't work.

Well, I don't know about all of these objections (although I clearly object to them all) but the last one -- whether they work -- I think clearly they actually do but they have to be done right. Kazdin and Rotella list the ways which don't work and the psychological reasons for it. I looked at those same things and thought they wouldn't work because they were poor economically. Let's go through them:

• Winging it: trying to reward on the fly. It is hard to get the prices right on the fly. What is more, you create expectations of what the future price should be. If you want to set incentives, you do need to think about it, and doing things as once offs don't cut it.
• The Hail Mary reward system: awarding for a raft of good behavior in a big bang. This sounds good in theory but requires lots to work out in practice. The main economic objection is the end game. The child has achieved 90% of the behaviour you want. However, they miss it at the end. They miss out on the reward entirely which is demotivating. You know it and can't commit to 'cancel Christmas.' Alternatively, they miss out at the beginning. Then what do you do? You have nothing to work with to get the rest of the behaviour up to scratch. What you want from economic rewards is smoothness whereby the effort to reward relationship is continuous and proportional. That means on-going rewards and not big bangs.
• Complex reward systems: these are systems designed to get every price right and cover all bases. Nice in theory but normal people -- including children -- have trouble understanding them. If you can't work it out, it isn't an incentive.

The end conclusion is that for rewards to be effective, they must be on-going but also restricted in supply. You have to avoid temptation to reward everything but make sure you target the stuff that is hard but also stuff that can be habit forming. That is why points work. You can set the rate of exchange and you can put performance on a chart for everyone to see. It is also transferable between parents and comparable across children.

Our fridge has an adorned point system with milestones each week that involve the ability to get a cafeteria lunch among other things. It doesn't work every day but it does work. Today, when my daughter finished her breakfast, she immediately asked "can I have my point now?" And that's the point.