Showing posts with label Extra Credit. Show all posts
Showing posts with label Extra Credit. Show all posts

Friday, September 9, 2011

Incentivizing Who Steps Off

Extra Credit: When Britain began re-locating criminals to Australia, the conditions aboard convict ships were atrocious, making even slave ships look like cruise liners. Two solutions were attempted. The first was governmental regulation, with laws determining minimal food rations, exposure to light, and the like. After this failed, an economist developed an alternative using incentives. At the time, Captains were paid in full, on a scale based on the number who stepped on the ship, as they departed the dock. Instead, this economist proposed, they should be paid upon arrival, and be paid on a scale based on the number of healthy passengers who stepped off. This new method of payment incentive instantly increased the survival rate nearly three-fold.

Though it was a massive success, were there any issues with this incentive?

Corruption would probably be the most likely issue with this incentive. Captains were encouraged to arrive with passengers. If there was no method of confirming the history of passengers onboard, Captains could potentially turn to kidnapping to gain more "convicts" to deliver. Once arrived, any convicts who pleaded innocence or tried to explain their situation would probably be muzzled, called crazy or dishonest, or killed. Even if the Captains were exposed, bribery was probably an easy way to avoid the law. Without a transcontinental system of communication, there would be no easy way to determine if a Captain "gained" a few extras or fudged the numbers. To add to the misery, weaker members who were likely to die before reaching land were probably killed early to save resources for the more healthy ship members. It would become a brutally accelerated process of Darwin's Natural Selection.