Ori and Rom Brafman recount an interesting episode that sheds light on the psychological effects that monetary incentives have on us. In Sway: The Irresistible Pull of Irrational Behaviour, they visit Switzerland in 1993, where the Swiss government was planning to designate either one of two small towns as nuclear waste repositories. Two researchers were interested as to how the townspeople would react and went out to get some answers.
They first broached the idea to one of the communities during a town hall meeting. They said that federal research revealed that there was a suitable site for the building of a low to mid-level nuclear waste repository near the town. The essence of their message was, ‘Would you take one for the team?’ Despite (naturally) being worried, 50.8 percent of the community agreed to the proposal.
The dissenting residents remained a major obstacle so the government decided to sweeten the pot with a little money. This time, they went to the residents and told them that they would be provided with USD2,175 per year, per person, paid by all the taxpayers in Switzerland.
Now here comes the interesting part. Only 24.6 percent of those presented with the new offer accepted the proposal. So they increased it to USD4,350, and then to USD6,525. How many people changed their minds? One.
The next post will examine why monetary incentives, like the one the Swiss government proposed, could actually produce unexpected reactions.