I will only act on an incentive if it is more valuable to me than my next best alternative. For example, if my husband promises to clean the garage if I wash the dogs, my incentive is a clean garage. My opportunity cost is all those other things I could do instead of washing the mangy mutts. If I value a clean garage more than I value an afternoon spent washing dogs, I'll get out the shampoo. If, however, I value an afternoon reading a book, or baking a pie, more than I value a clean garage, the dogs and garage both stay dirty.
Incentives powerfully affect behavior.
Sometimes we can accurately predict what these effects will be, other times we cannot. We do know, however, that when we create an incentive we send people an important message about how they can spend their time and we provide a non-coercive motivation to behave in a way we find desirable. Recognize that through the indirect use of incentives, a market economy promotes social cooperation. Suppose that Claire's parents offer to send her to a music camp for two weeks this summer if she maintains a 3.5 grade point average throughout the school year. Dr. Lee's example of the way English prisoners were treated when the incentive structure for transporting them changed is striking.