ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Monetary incentives have two kinds of effects: the standard direct price effect, which makes the incentivized behavior more attractive, and an indirect psychological effect. In some cases, the psychological effect works in an opposite direction to the price effect and can crowd out the incentivized behavior.

Detailed explanation-2: -Examples of positive incentives include recognition, promotions, raises and so forth. Negative incentives: Correct mistakes or discourage certain behaviors. Negative incentives include reprimands, demotions, pay decreases and other kinds of penalties.

Detailed explanation-3: -Incentives, whether they are intrinsic or extrinsic (traditional), can be effective in encouraging behavior change, such as ceasing to smoke, doing more exercise, complying with tax laws or increasing public good contributions.

Detailed explanation-4: -The top three incentives are cash, gifts and experiences. Some examples of gifts are electronics, ride-share credit and gift cards. Experiences include perks like tickets to concerts, festivals and sporting events. Your rewards must excite employees.