January 31, 2019 tedplayer1

Why we do what we do

The incentive model of human behaviour

TEDxTUWien-why-we-do-what-we-do-shutterstock_576194491The concept of incentives is an attempt at explaining why we humans behave the way we do. If you break the topic up, you can easily derive a conclusion of what that naturally translates into. We, as humans, behave in a certain way because it will offer us a reward of some kind – a positive incentive a.k.a “satisfaction of some sort” –or we avoid certain behaviours and thus evade punishment – a negative incentive.

Intuitively, we slip into this kind of thinking between the age of 3 and 5. Think of your potentially first-ever-dilemma this way: “You might struggle for a while to stay well behaved at the dinner table and earn yourself an amazing goodnight story by your favourite aunt… or you act like a little pest and risk going to bed without one. It is up to you. Your actions directly correlate with what you´ll get out of life.”

Now, since you are reading the TEDxTUWien blog I assume, you most likely successfully passed through the toddler phase (if not, kudos to keeping up!) and it´s time to get into some more details.

Partitioning incentives: We generally split human incentives into 3 main fields (each of which could be positive or negative) and their corresponding subfields, which we won´t dip our toes into here. We are talking about economical-, moral- and social incentives.

Economic incentives: The most obvious of them, the economic incentives, are triggered when we are confronted with decisions concerning our money, property or other forms of wealth. These incentives lead us to steadily compete for an increase of our wealth throughout our life. They can be oversimplified in one sentence “Every woman for herself / Every man for himself.” But unless you want to pull a Patrick Bateman from “American Psycho” on everyone and potentially get yourself into some “sticky” situations, you´ll find that diversification of incentives gets you the best slice of life’s pie.

Moral incentives: The phrase “What would Jesus do?” actually has a place with this one. For you to understand moral incentives it is easiest to put yourself into the point of view of a third party and ask yourself these two questions “Where will your decisions weigh in on your culture’s spectrum of right and wrong?” and “Does their verdict of your decisions insinuate a reward or punishment?”

Social incentives: These motives reflect our struggles of dealing with social hierarchy and influence our behaviour on altering the way how fellow humans perceive us. You punch someone in the face and you will soon be known as “that guy.” It is rather self-explanatory.

Bringing incentives together

Let´s consider the following thought experiment.

You just got a new car and are pumped to finally put the pedal to the metal, haul ass, go as fast as greased lightning… but nonetheless some thoughts are lingering in the back of your mind and stopping you from doing exactly that. Let´s see… you shouldn´t overspeed while driving through the city because the negative economic incentive of getting a hefty fine doesn´t really add up to your budget plan. Furthermore, you may want to minimize the risk of causing an accident and hurting innocent people, which leads us to examine our speeding-problem from a new angle; the moral aspect connected to our actions.

Finally, we´ll conclude that an accident caused by our wrongdoing might conflict with our social integrity or our desire to be liked and accepted by other people and thus provides us with a social incentive to do “the right thing.” But on the other hand, there are no speedcams in that part of town, there are rarely any other vehicles on the specific street you´re thinking of racing down and last but not the least, you are an outlaw anyway, so you couldn´t care less.

So, even a simple problem like this one is in fact a string of multiple incentives working together and urging us to find the ideal balance between them. eg., The likely outcome of the problem which benefits us the most.

Keep in mind

Where the economical- and social incentives are quite straightforward and easy to recognise, the moral incentives are a bit trickier to identify due to their complex nature. Depending on the culture in question these moral standards to which the majority of its people adhere may vary strongly from your own culture standards and end up putting you in uncharted moral territory. Broken down, this simply tells you that your moral compass may not show you it´s true north when you try to utilise it in foreign environments.

Wrapping this all up, economic incentives might seem to play the most important role: humans will choose whatever option yields the greatest material benefits. However, there are also many cases in which humans will ignore economic motives in order to impress other people or follow their own consciences. So, in different cases, humans will behave selfishly, morally, or socially, or some combination of these. Ultimately, regarding the model of human incentives, we can define human beings according to the things they desire and fear—material, social, and moral rewards and punishments. Human nature, one could argue, is a combination of these three competing desires, no single one of which is the most powerful in every case.

By Alexander Drechsel