Thursday, February 24, 2011

Incentives work better than disincentives

Would you pay for plastic bags at a store checkout counter? That is an issue in the Toronto region. Of course retailers pay for the bags they provide customers at checkout. The price per bag is minuscule because the number of bags used is large. But efforts to change human behaviour by penalizing them often just create resentment, antagonism or worse.
In libertarian philosophy, choice is always preferred and coercion is always shunned. So whether it's a ban on plastic bags or recreational drugs the operative word "ban" is antithetical to libertarian thinking. Even a surcharge on plastic bags rankles most libertarians. There must be a better way to change behaviour if that is a goal.
I'll put aside for a moment whether plastic bags are desirable or not (here is an opinion I would support). Personally, I have no problem with plastic bags, but if I was a store keeper, I would at the very least offer a choice, like they used to: paper or plastic, very sensible.
Of course store keepers feel compelled to abide by the government edict that prohibits "free" bags and they feel no obligation to offer a choice. Why? Because they were not offered a choice, and orders are orders. But imagine the goodwill that customers would feel if indeed some entrepreneurial store keeper started offering recyclable paper bags to their customers in the spirit of "you can catch more flies using honey than vinegar."
Some people at Volkswagen had thoughts along those lines a while back, so they sponsored what they call "The Fun Theory." The video below was part of that enterprise which causes people to change their behaviour if they are incentivized to do it. Watch the video and go see the others here.

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