Thinking Economics

Thinking Economics

Most human behaviour can be viewed through an economic lens to identify trends, patterns, biases and misconceptions. This column assesses Nigerian behaviour by applying Economics to behaviour and behaviour to Economics.

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Incentives: Some Things Money Can't Buy

Chuba Ezekwesili

Chuba Ezekwesili

Chuba is an economist, a data analyst, and the co-founder of Akanka - a global design studio.

Not too long ago, I saw a tweet by a friend of mine. The tweet caused quite a stir. It read as follows:

"This man has been persistent in his chase. Eleven months now. Still hasn't given up. Time to bring out the big guns. Every girl knows the easiest way to chase a man away is to ask him for money."

This friend of mine believed that asking for money would dissuade the man from his chase. If only she knew how badly that could go. It seems easy to predict what happens when money is used as an incentive (or disincentive). However, using money in this way can have rather unpredictable consequences.

For a long time, economic theory assumed complete rationality of humans (homo economicus) when it came to incentives and decision making. The basic rule is that costs dissuade adverse behaviour and benefits incentivise good behaviour. This rule forms the backbone of a significant number of behaviour-altering methods. However, when money is introduced as a cost, the intended outcome becomes much less predictable.

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