Incentives

Describe 3 examples of how incentives can result in negative or unintended consequences.

While incentive is a main drive in the economy, it can sometimes lead to unintended or bad consequences. One example of how incentives can result in a negative outcome is when an incentive encourages an illegal or forbidden action. This can take the form of selling or buying illegal things or killing animals simply in order to make a profit. When someone's incentives motivate them to commit a crime or do an unethical thing, it has resulted in negative consequences. Another example of a negative consequence due to incentives is an incentive that ultimately hurts the economy as a whole. Finally, an example of unintended consequences resulting from incentives would be an incentive that leads to destruction. This could happen when an incentive motivates someone to do environmental, global, or personal damage.