When incentives become disincentives
December 16 2009, 3:09 PM
Lots of places try to steer your purchase via incentives. I've recently run
into a similar problem at both computer stores and pizza places where the
incentives annoy people. I call them misincentives. How do misincentives work? If the incentive is illogical or artificial
constrained, it can become a misincentive. If the buyer is not sure he is
getting a deal, or if small changes to the potential purchase cause big
price changes, then the incentive becomes a misincentive. Hiding faults that become known is a big misincentive. I am ok with a deal
on older technology, for example, if i know the tradeoff. But if i find out
about it accidentally or before i am about to buy, that discourages me too. Companies might think they need to create misincentives to compete.
They'd'be better off creating good incentives.
into a similar problem at both computer stores and pizza places where the
incentives annoy people. I call them misincentives. How do misincentives work? If the incentive is illogical or artificial
constrained, it can become a misincentive. If the buyer is not sure he is
getting a deal, or if small changes to the potential purchase cause big
price changes, then the incentive becomes a misincentive. Hiding faults that become known is a big misincentive. I am ok with a deal
on older technology, for example, if i know the tradeoff. But if i find out
about it accidentally or before i am about to buy, that discourages me too. Companies might think they need to create misincentives to compete.
They'd'be better off creating good incentives.