This is a way of encouraging specific actions without making them compulsory. Positive and negative incentives •Positive incentives encourage action. Negative incentives refer to bad consequences, such as losses and fines, which can discourage the behavior. What are positive statements? Provide illustrations of negative and positive, monetary and non-monetary incentives and how they shape behavior. The question of whether positive or negative incentives work better has long been a matter of debate in society. From biblical times to the very recent past, children were thought to be better motivated through negative incentives — known in the bible as the “rod” and two generations ago as “a good spanking” — than positive incentives. a. Learn vocabulary, terms, and more with flashcards, games, and other study tools. An example of a negative incentive is the prospect of a speeding ticket. A good example is the case of outsourcing in the early 2000’s. For example: A fall in incomes will lead to a rise in demand for own-label supermarket foods The main disadvantage associated with economic incentives is that they can be inappropriate for dealing with environmental issues that pose equity concerns. Start studying Positive and Negative Incentives. Changes in incentives cause people to change their behavior in predictable ways. - Extra credits can be used to incentivize students to participate more in class - A tax cut in the agricultural sector is a good incentive for people to invest more in the sector •Negative incentives also … Positive statements are objective statements that can be tested, amended or rejected by referring to the available evidence.Positive economics deals with objective explanation and the testing and rejection of theories. Speeding tickets discourage drivers from breaking the speed limit. Incentives can be either positive or negative, and can thus encourage or discourage a particular action. 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